oil trading at 45$ now and its impact, outlook going forward
TRANSCRIPT
1 Oil at 45$ now and outlook going forward
The Crude oil price declined by half to current 45-50 $ per barrel bringing to end of four year period of stable
prise of around 105$ for barrel,which has a wide implications to the producers in terms of declining profit margins
and for consumers the real income is increased so increasing consumprion.
So,Lets see the outlook of the major Oil producing countries,Major oil consuming countries and the way forward
with regards to the price movement,Demand,Supply…
First-Causes for the Sharp decline in oil price?
Supply-Demand: There is lot more of oil is getting pumped which is greater than the demand, So most of it is
being stock piled for later –Which could be one of reason for price drop…
IEA
2 Oil at 45$ now and outlook going forward
Shale Oil-
Increase in supply from unconventional sources --Shale oil by US there by increasing total supply
OPEC Role-
The OPEC decision to maintain its production level of 31.5 mb/gestured a substantial change in the OPEC policy
aims from aiming an oil price band to maintaining market share.
US Dollar appreciation-
US Dollar appreciation tends to have a negative impact on the price of oil as demand could drop in coun tries that
have a loss in the purchasing power of their currencies.
Suppliers-
3 Oil at 45$ now and outlook going forward
The Oil Producing Countries
(CNN)
The top oil Producing countries OPEC, US, Russia continue to pump more oil at these low price levels, for their
relevant approach, Like OPEC wants to hold its market share, Then Russia with financial sanctions On-it needs
to sell oil to manage its payables. Hence the Oil supply seems to be more or less stable at the current levels.
Oil consuming countries-
4 Oil at 45$ now and outlook going forward
The Global macro index outlook appears positive wrt the oil importing countries So, It look as if the direction of
the oil demand will go up. Global oil demand growth is expected to climb to a five-year high of 1.7 mb/d in 2015,
before moderating to a still above-trend 1.4 mb/d in 2016 thanks to lower oil prices and a strengthening
macroeconomic backdrop.
Conclusion-
With the current oil price below 50$ and globally strengthening growth the pressure will be on the major oil
producing countries as the oil price for most of nations is below breakeven, So the governments have to adjust
shortage of per barrel price and breakeven price by Lowering government spending/Raising more debt/ Tax
structure amends Which will surge the pressure on Oil producing countries
5 Oil at 45$ now and outlook going forward