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World oil glut defeating smaller producers

oilrigThere is now a global glut of oil, resulting from continued production despite falling demand.

The surplus is at its highest level since 2009, according to the Organisation of Petroleum Exporting Countries (Opec).

Some countries, such as Saudi Arabia, have actually increased production which has resulted in the market being awash with cheap energy.

Producers in other countries, such as US shale drillers, have had to cut spending and slash jobs because of the lower prices caused by the surplus.

Oil prices have fallen by 40% over the past 12 months, while the supply has gone up by 2.5 million barrels a day. Global demand is 1.6 million barrels a day.

The last time the market experience such a glut was when global demand collapsed in the wake of the financial crisis in early 2009.

Opec countries appear to be on course to maintain production levels as a way to eliminate competition from other countries at the cost of enduring lower revenues.

“Non-Opec producers will now see their production levels decline for the first time since 2007,” the Opec report said.

The report admitted low prices were providing "a challenging market environment for some higher-cost crude oil production."

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0 #2 Simon 2015-11-30 14:33
News from Iran signing contracts worth $30 billion to push daily production from 3 million barrels to 5 million at a time of world surplus of 3 billion barrels. Price must give, taking out those that cannot compete. Lets break the Oil Cartel once and for all by investing in renewables
+1 #1 Steve.O 2015-11-30 11:12
All this going on during a 180 country climate change conference in Paris that includes the OPEC members yet seeks to reduce the use of and dependence on fossil fuels. Poland's coal reserves and France's nuclear energy are other thorny topics for the EU.

Still, if all goes well I will be dead in the next 60 years - but no doubt having eaten so much preservative and pesticides over the years - my body will be good for another 40. Nuclear waste however not even beginning to decay in that time.

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