Oil price drops as Saudis “won’t cut production” – DMR

Oil prices fell again after Saudi Arabia pledged not to stop pumping at any price, according to the daily market report from npower. Saudi Arabia’s oil minister Ali Al-Naimi said […]

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By Vicky Ellis

Oil prices fell again after Saudi Arabia pledged not to stop pumping at any price, according to the daily market report from npower.

Saudi Arabia’s oil minister Ali Al-Naimi said in an interview with MEES his nation wouldn’t flinch on producing oil even if it went as low as $20 per barrel. Saudi Arabia is influential in the oil group OPEC.

Sarah Astley, Client Portfolio Manager at npower said: “We’ve also seen oil drop below $60 a barrel this morning as Saudi Arabia have said they won’t cut production at any price.”

Elsewhere on the energy market, gas and power prices opened a “touch firmer” this morning despite healthy gas and power margins.

The UK’s gas system, the Linepak, is forecast to close “around 5million cubic meters (mcm) long”, i.e. with more than it needs, said Mrs Astley.

Demand for gas also remains around 17% below seasonal normal levels.

Meanwhile gas flows into the UK from Belgium via the BBL pipeline are unchanged at around 21 mcm and from Norway via the Langeled pipeline at 72mcm.

The latest 30-day forecast also suggests warmer than expected January temperatures.

This isn’t pushing near-term prices down though, said the analyst: “Despite all these bearish drivers the prompt has opened a touch higher due to colder weather forecast towards the end of the week and also as liquidity remains thin as we’re in the holiday period.”