In Oil & Companies News 15/05/2015
Saudi Arabia is succeeding in its efforts to drive rivals like the U.S. out of the oil-drilling business, according to a story published late on Wednesday by Financial Times.
Oil prices took a leg lower, to the session’s nadir, a slide that coincided with a story written by Financial Times‘ Anjli Raval, who quoted an unnamed Saudi official who voiced optimism that the kingdom will retain its dominance as the world’s leading producer.
West Texas Intermediate crude futures fell 0.8% to $60.25 a barrel in recent trading, according to FactSet. That’s after prices rose as high as $61.85 earlier on Wednesday. United States Oil Fund (USO) and the iPath S&P GSCI Crude Oil Total Return Index ETN (OIL) declined by 0.2%.
The FT reports that the kingdom’s production rose to a record 10.3 million barrels a day in April, and that the Organization of the Petroleum Exporting Countries has shown no signs of reversing course at next month’s meeting. What’s more, the FT quotes the Saudi official saying that the country wishes to “extend the age of oil.”
“There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil including US shale, deep offshore and heavy oils,” a Saudi official told the Financial Times in Riyadh, giving a rare insight into the kingdom’s thinking on oil strategy.
After collapsing under the weight of global oversupply last year into March, oil prices have rebounded strongly, nearly 40% since bottoming in the middle of March. Market watchers are divided about what’s in store for oil from here. Some, such as oil entrepreneurs T. Boone Pickens are bullish that prices will continue to rebound into the end of this year. Goldman Sachs warned on Tuesday that the market could be in for a double-dip drop.
