As OPEC member nations plan to meet in order to decide production levels for the next six months, many countries are expressing concern that the low price of oil is hurting their budgets. They want to see the price of the barrel of oil go back up to something “reasonable” like $75-$80 per barrel.
Kuwaiti oil minister Ali Saleh Al-Omair said that his country needs the price to be at $77 in order to break even. Angola’s minister said that their break-even point is $80. Iraq and Venezuela need between $75 and $80.
Oil is presently trading at $64 a barrel which is actually up from its six year low last January. Just a year ago, oil was at $115.
In January OPEC refused to lower production and decided to stay the course. Russia has equally refused to lower its production because while lowering production might boost the price, the country doing the lowering will lose more money.
Nevertheless, OPEC is betting on a 60% increase in world demand for oil by the year 2040. American oil company conical Phillips is equally bullish predicting similar increases.
Source: La Presse