Oil settled lower on Tuesday after rising to the highest since July 2015 the previous day, while tension flared between Saudi Arabia and Iran, and the Saudi crown prince tightened his grip on power.
The rally in oil prices over the past two weeks came to a halt on news that OPEC is actually exporting more oil than previously thought. A month ago, oil prices appeared to be higher than they should have been, with weak demand, elevated inventories, and a recognition that the nine-month OPEC extension would be inadequate to balance the market.
As oil prices remain unsteady and OPEC continues to make headlines every hour, the world is focused on oil's immediate future. As Saudi Arabia announces plans to slash production and move their economy away from oil dependency, many industry insiders are predicting that the now over-saturated market will reach an equilibrium with higher commodity prices by 2018 and U.S. shale production will continue to grow along with global demand.
Falkland Islands oil explorer Rockhopper Exploration Plc has confirmed cost cuts at its Sea Lion project, which will reduce the scheme´s break-even price to US$ 45 a barrel. Capital investment at Sea Lion to reach first oil is now estimated at US$ 1.5bn.
More than 50,000 workers blocked the centre of Comodoro Rivadavia, in Argentina's Patagonia main oil-producing region in a protest against layoffs. Striking oil workers were joined by teachers, truck drivers, builders and other sectors in the demonstration.
The meeting of the world's leading oil exporters to discuss capping production has ended without agreement. After hours of talks in Qatar, the country's energy minister Mohammed bin Saleh al-Sada said that the oil producers needed more time.
Four of the world's biggest oil-producing nations moved to freeze their production on Tuesday to try to halt the 70 percent drop in the price of crude because of a glut of oil on world markets. The agreement was reached by the oil ministers of Russia and three members of the Organization of the Petroleum Exporting Countries, Saudi Arabia, Venezuela and Qatar, during a closed-door meeting in Doha, the Qatar capital.
As anticipated by the Federal Reserve's report earlier this week, US economic growth braked sharply in the fourth quarter as businesses stepped up efforts to reduce an inventory glut and a strong dollar and tepid global demand weighed on exports.
The World Bank is lowering its 2016 forecast for crude oil prices to $37 per barrel in its latest Commodity Markets Outlook report from $51 per barrel in its October projections.
Ecuador President Rafael Correa said that his government was “tired” of pushing OPEC to decrease output and that the nation would keep working as if the oil cartel “did not exist.”