As reported by International Business Times, it could be argued that conflicts in the Middle East bode well for oil prices, however the growing tension between Saudi Arabia and Iran, arguably the region's two superpowers, has led to a new low for the price of crude, which currently rests at it’s lowest price for a decade, at US$33/bbl.
Some economists have hypothesised if anyone could stop, or at least minimise, the oil price crash it would be Riyadh, as Saudi Arabia is the world’s second largest oil producer. It has been argued that if Saudi Arabia were to take measures, the oil market would respond.
However, while some discuss the repercussions others experience them, leading to a unsettled week of oil prices in Kuwait. On 6 Janaury 2016 it was reported by Kuwait News Agency (KUNA) that the price of Kuwait oil went down to US$27.67/bbl, a drop of US$0.98 from US$28.65 on 4 January – these figures were intially released by the Kuwait Oil Corporation (KPC). In the world market, the crude price went down by more than 2% and the price of Brent blend dropped US$0.80, selling at US$36.42/bbl. As the week continued, the news reported that the price was still dropping.
On 7 January it was reported that the price of Kuwaiti oil had dropped a further US$1.23, and oil was valued at US$26.33/bbl. The world market followed with crude price down 6%, due to the rise of US crude reserves and weak economic reports from China, the world’s second largest crude consumer. Brent blend followed again with a drop in price, valued at US$34.23/bbl, a decrease of over US$2/bbl.
8 January has seen one of the biggest drops over the week plunging the value of Kuwaiti oil to record lows of US$24.12/bbl, losing a value of US$2.32 - as reported by KPC. While oil was scraping the barrel, Brent blend rose by 2.3%, reaching a value of US$34.72/bbl, a comforting US$2 higher than its record low of US$32.16/bbl in 2004.
Edited from various sources by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/refining/08012016/record-drop-in-price-of-kuwaiti-oil-2092/