oil
December 3, 2018

On Monday, Qatar unexpectedly announced it will withdraw from OPEC in January to focus on developing its massive liquified natural gas (LNG) reserves and boosting oil production above approved quotas. OPEC's de facto leader, Saudi Arabia, cut ties with Qatar and led an ongoing economic boycott in June 2017, joined by Egypt, the United Arab Emirates, and Bahrain. But Qatari energy affairs minister Saad Sherida al-Kaabi said politics weren't behind the decision to quit OPEC, and he will attend the 15-member organization's meeting later this week. "For me, to put efforts and resources and time in an organization that we are a very small player in and I don't have a say in what happens," he said, "practically it does not work, so for us it's better to focus on our big growth potential."

Qatar produces only 600,000 barrels a day (bpd) of oil, versus Saudi Arabia's 11 million bpd, so its departure and aspirations to increase crude output are expected to have little effect on sagging global oil prices; OPEC is expected to tighten production along with its allies. OPEC, or the Organization of the Petroleum Exporting Countries, was formed in 1960, and Qatar joined in 1961, the first nation to sign on outside of its founding members. It will become the first Mideast country to quit OPEC. Peter Weber

February 16, 2016

On Tuesday, the oil ministers of Saudi Arabia, Russia, Venezuela, and Qatar emerged from an unannounced meeting in Doha to announce that they would not increase oil output above January's levels, if other major oil producing nations agreed to freeze supply as well. The Venezuelan oil minister said he would be discussing the freeze with Iran and Iraq in Tehran on Wednesday, though Iran has pledged to ramp up its oil output after the end of international sanctions in January.

The meeting and proposed output freeze follow 18 months of slipping oil prices, down now to about $35 a barrel, the lowest price in more than a decade. Amid oil's long slide, major oil producing countries have put defending or increasing market share before shoring up prices, and the Doha meeting is widely seen as the first serious step to stabilize prices. Peter Weber

January 23, 2015

The death of Saudi Arabia's King Abdullah has led to speculation about what will happen to the oil markets. Oil prices briefly shot up late Thursday, in contrast to the recent downward trend.

But on Friday, successor Crown Prince Salman said he did not plan on implementing any significant policy shifts, so analysts expect prices to stay low, according to Christian Science Monitor.

It's unclear who will succeed King Salman, 79, and what, if any, changes to policy will be made then. Julie Kliegman

January 13, 2015

Global oil futures continued their slide, hitting another six-year low early Tuesday. The two global sweet crude benchmarks, Brent and West Texas Intermediate, both dropped below $45 a barrel, a low not seen since the Great Recession days of early 2009. Analysts blamed the new selloff on remarks by Suhail bin Mohammed al-Mazroui, oil minister of the United Arab Emirates, who said that OPEC would stay the course with its decision to not cut production and predicted that oil prices would eventually stabilize at $80 a barrel or lower. The markets shrugged off positive news from China, which imported a record amount of oil in December. 

"We are still very much sentiment-driven and the sentiment will continue to be negative as long as there is no change in production," says oil analyst Thina Saltvedt at Nordea Bank Norge. "Oil is still piling up." Peter Weber

December 15, 2014

Oil prices continued a months-long slide on Monday, briefly hitting five-and-a-half-year lows. U.S. crude futures fell by more than 2.5 percent to as low as $56.25 a barrel before inching up again. Prices have fallen by more than 40 percent this year, and energy industry analysts expect further declines. "The template is still in place," market analyst Alastair McCaig told Reuters. "Over-supply and dwindling demand mean that the pressure will still be on oil." Harold Maass

November 28, 2014

OPEC, the world's leading group of oil exporters, this week declined to slash production, disappointing countries, such as Iran, that would like to see oil prices climb amidst a worldwide glut of oil and natural gas. The group's decision to maintain its level of output was led by Saudi Arabia, which somewhat mysteriously is keen to keep prices low.

Liam Denning at The Wall Street Journal writes that Saudi Arabia's move may be part of its ongoing rivalry with Iran over influence in the Middle East:

Saudi Arabia’s chief antagonist is fellow OPEC member, and main geopolitical rival, Iran. Lower oil prices squeeze Iran’s finances and capacity to oppose Riyadh’s aims in regional warzones such as Syria. As an added bonus, lower oil prices also hurt non-member Russia, another antagonist. [The Wall Street Journal]

Partly as a result of this feud, Denning says that oil prices, currently below $70 a barrel, could remain below the triple digits for years. Ryu Spaeth

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