Inside Story – What’s behind the falling price of oil?

With too much global supply and the lowest price in nearly 20 years – there’s anxiety about a possible oil market meltdown.

US crude prices fell below a barrel on Tuesday, before settling down, but only a bit.

While most major oil companies are slashing their budgets and jobs, some of the biggest oil companies like Saudi Aramco have not cut back on production.

And some OPEC states, like Iran and Iraq, are looking to increase production.

In the past year, the price of a barrel of oil has fallen by more than 50%.

The highest price in the last 12 months was 0 a barrel.

Some investment bankers are now warning that oil could crash to a barrel.

So, what’s behind the falling price of oil and what does it mean for consumers?

Presenter: Peter Dobbie

Guests:

Cornelia Meyer – CEO of Meyer Resource, A Macro-Economic and Energy Policy Advisory.

Bismarck Rewane – Managing Director of the Financial Derivatives Company.

Mamdouh Salameh – International Oil Economist and Consultant.

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40 thoughts on “Inside Story – What’s behind the falling price of oil?”

  1. It reached 50 US-$ for a barrel Brent again now, OPEC got another member with Gabon… The 2nd new/old member in 7 months, in December 2015 first Indonesia returned (altough they left 2008 saying they are now a net oil importer… and this got worse until December 2015 with a bit below 50% of the oil needed came from Indonesia with its ~255 to ~260 million population!

    In June 2016 Gabon returned after a 22-year break (1975–1994, 2016). At least Gabon is a permanent EXPORTER, since it is really crazy to take Indonesia which produces quite much barrel (900,000 to 950,000 usually right now) but needs much more, I guess the oil Indonesia will buy in the future will be to 99%+ from OPEC^^ Since they fight for market shares there, never thought about it, but this might be even a reason since Indonesia seems to have a few decades of strong population growth and economic growth in the next years (country with most moslems, that is one reason for high birth rates, migrants leaving the countries are there but only some… Indonesia just started heavy coal mining since China "around the corner" imports Australian coal already for a very very long time,

    Gabon… It is just like Equitorial Guinea, a very very small country, people live mostly in poverty on rural base with 1 a bit larger capital, and I think together the whole country gots around ~1.7 million population only, increasing, especially in rural areas, the life or incomes are a bit better than in most other neighboor "black africa" states… but only very very few really make good cash in production of 200,000 to 225,000 barrels…. Eq… Guinea is also such a state, created only once as old colonies to divide the oil between many countries, same like with Saudi-Arabia, the King back than took Mekka and Oman, United Arab Emirates and maybe even parts of Kuwait and Iraq/Iran could be his target, just too increase the area and only few years later they would realise they hold over half of the worlds easy and cheap to produce oil reserves in the early 1950's 😀

    OPEC tries to defend market shares with discounts… but China is weakening and gets the Western "Babyboomer"-Problem, only we have no "1 child policy", the demographic change in China is the result of this, and that is why India will be No. 1 soon, they just reached 1.3 billion population in India in the last days, while China has 1.411 billion, but in numbers and in per cent has a smaller growth already yet…

    There is more tan enough oil, but is the price to high there is production from very much areas and OPEC loses again market shares……

    Reply
  2. Oil went down because the US,UK & O.P.E.C fixed it! Putin had to suffer after upsetting the Ukraine with his silly move – Russia must behave & understand the Western countries are in charge of world power!!!

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  3. 5:00 this goofy guy's nutz are obviously tied in a noose , that will yank HARD and give him BlueBalls if he answers the interviewer's questions with "the wrong answers".

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  4. Maybe the prices are falling in the US but here in Serbia we have the highest price anywhere for that matter. 1.50$ for 1 liter

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  5. We do not need higher prices. Larger corporations and wealthy persons need to be more efficient with their money. We used to applaud strong competition. Doesn't it seem like there is drive to capture profits before toiling to provide a more valuable product?

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  6. Sorry Al-Jazeera, but so far, this drop in price has NOT been bad news for me the Consumer! Nonetheless and as someone who appreciates the benefits of the Black Gold on our modern way of life, I sincerely believe that this drop in prices will benefit the producers themselves by extending the lifespan of the age of oil, for the simple fact that when you have a readily cheap source of energy, there exists no incentive whatsoever to go and look for a replacement. So let us enjoy this great commodity for another 100 years.

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  7. There will be so many countries using biodiesel in the future, Indonesia has lots of oil palm that can make that biodiesel, it's a good renewable thing.

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  8. Excellent video, really informative. However, was wondering if you could kindly provide the sources of the provided information??!! Many Thanks.

    Reply
  9. Thank you for your video! May be we should consider other alternatives. I am gathering information about bitcoin.
    I bought bitcoin when it was 400 usd, it is 670 usd today, there were many restrictions in Argentina to buy USD, so I decided to buy bitcoin. I am building my own blog bitcoin.xp3.biz
    I am planning to buy bitcoin as saving and then sell it.

    Reply
  10. So…does OPEC and other countries like Russia try to attain monopoly to create an advantage for their own country from the money they recieve??

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  11. Oil producers were all on the same page generally for a long time, but not so much now. Over producing hurts Russia and Venezuela, but also hurts Canadian tar sand oil, and any crude that is expensive to refine. So over producing has positives it also has negatives and it can get real touchy.

    Reply
  12. tottally missed that renewable function on a manufacturing economics.

    that means they get cheaper to produce and will undercut oil no matter what price oil sits at

    Reply

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