The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
P.Ramakrishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur
Accordind to the Organisation of Petroleum Exporting Countries(OPEC) Saudi Arabia produces about one third of the oil .We Have recently witnessed the huge falling prices in the oil which went down from $115 a barrel to nearly $55 a barrel .This was due to the failed agreement between the OPEC and Saudi Arabia on production curbs,wars in Iraq and Libya and USA exporting less oil .Russia ,Nigeria ,Iran ,Venezula were the countries that were hard hit by the tumbling prices of oil.
As per the news published in Reuters on 15th March 2015 ,the price of the oil has in the past weeks has been stabilizing and reached $60 per barrel .As the demand of the crude oil gets higher,the prices of the oil will continue to increase and will try to firm up in the coming days .
The main resaon in the drop of the oil prices was more of expectations and speculations of demand and supply of oil rather than market fundamentals .The prices of the oil in the later part of the year will be decided by the meeting which is going to be held in the later part of the year .Also the Kuwait’s OPEC governer said last week that the current production policy will also be extended.
Also the Advisor to the saudi Arabia’s oil minister said “None of us know the future. Once the conspiracy theories lost their traction, serious commentators went back to fundamentals and the price started to stabilize around the $60 mark seen in the last few weeks,” he said at an energy conference in Doha.