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12/01/2015

Topic Reading-Vol.1329-12/1/2015

Dear MEL Topic Readers,
What it costs to produce a barrel of oil
Familiar with oil prices? Not the price of gas that you pump into the gas tank of your car but the crude oil prices traded in the world market. The price of oil plunged to around US$40 per barrel, or 159 litters, in the latter half of 2015, which was traded over hundred dollars before and after the 2008 financial crises. Good news for users but bad news for producers.
Why the plunge? It was driven by the decision made by OPEC, Organization of Petroleum Exporting Countries, to keep the production level despite the decreasing demand.
Why is OPEC so influential? OPEC member countries produce about 40 percent of the world's crude oil, but more importantly, their oil exports represent about 60 percent of the world petroleum trade.
Why do they want lower oil prices? They seem to want non-member states such as the US, Canada and Russia, whose production costs are much higher than OPEC members, to be squeezed out to the market.
Enjoy reading and thinking if OPEC’s target is limited to non-member states or greener energy.

http://money.cnn.com/2015/11/24/news/oil-prices-production-costs/index.html?iid=obnetwork

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