Fra Oilprice.com
It’s still very early in the week but this is shaping up to be a good one, with wind power getting put through the wringer, with a major oil find being reported in West Africa, and the EU sniping at Middle East governments about oil production, and ISIS undercutting everyone.
This will not be news to many given the coverage but Brent oil prices dropped to their lowest point for four years on Monday, reaching $82.34 a barrel, a level unseen since October 2010. However, with the next meeting of OPEC not happening for over two weeks and with supply unlikely to waver before then, we should all brace for further drops. The governments of Saudi Arabia, Kuwait and the UAE seem blissfully unconcerned about potential economic circumstances, despite the EU making worried murmurs about how this could drive the fragile continent’s economy back into recession. OPEC’s reaction is typical of the body that feels it has the final say on oil prices, but renewed violence in Libya, Nigeria and Ukraine amid a drop in Chinese demand have created a perfect storm. With the US still not committing to lifting the export ban, OPEC could very well see itself forced to react before its meeting on November 27. If not, the Brent price will surely plumb new record lows.
Well, if any doubt lingered on whether it paid off to have friends in high places, then no longer. The Sunday Times broke a story over the weekend, stating that Tony Blair had received sums of around $65,000 a month in 2010 from oil services firm PetroSaudi to arrange deals with top officials. Successful agreements allegedly led to a further 2 percent kickback for the former British PM. While on the surface, this type of networking is hardly new, the fact that it happened while Blair was already the Middle East envoy for the Quartet has brought his integrity into sharp question. While no sanctions have been taken for now, this could change rapidly if this cash-for-contacts deal was shown to be at odds with his efforts to bring peace to the region.
In the midst of all this, nervous about the slowing down of its advance and the loss of key oil assets, ISIS has been reported as selling oil on the black market at just $20 per barrel, Russia Today reports. At the weekend, the Iraqi Army took control of Baiji, where the country’s biggest refinery is located. ISIS still controls ample oil fields and the means to sell the resource quick. However, as air strikes and Kurdish grit begin to take their toll on ISIS numbers, it seems like the Islamic State is in need of cash. It is still bringing millions a day from oil sales but to sell four times cheaper than official levels smacks of desperation.
