OPEC Will not Change Mind Even at $40 Says UAE Energy Minister

OPEC won’t rush to cut oil production even if prices fall as low as $40 per barrel, one of the cartel’s members said Sunday.
The energy minister for the United Arab Emirates told Bloomberg at a Dubai conference that the middle eastern oil producers believe “the market will stabilize itself.”

“We are not going to change our minds because the prices went to $60 or to $40,” Suhail Al-Mazrouei said.

Even as it has watched prices dip, OPEC declined to cut back on production at its November meeting. Some observers had expected a production cut to boost the price of crude.

Oil prices have tumbled 40% this year and are now trading below $60 per barrel, a five-year low. Gas prices have come down, too — the U.S. nationwide average was $2.60 on Sunday. In some parts of the country, gas is below $2.

Lower energy prices are good news for consumers and some sectors of the economy, but they are not without victims. Plunging prices have been blamed for stock market turmoil, and some oil producers are concerned. Some have begun cutting back on spending and staff, and the U.S. shale industry is worried OPEC is trying to kill off its profitability.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza