Members of the Organization of the Petroleum Exporting Countries (Opec) are set to meet later today (November 27th) to discuss how to address the slump in global oil prices.
Ahead of the meeting Brent crude fell to $77.75 (£49.35) a barrel, representing a drop of 58 cents. US crude was also down by 40 cents at $73.69 a barrel when the markets closed on Wednesday. However, figures from the US Energy Information Administration showed that inventories of commercial US crude oil had risen by 1.9 million over the past week.
Brent crude oil futures have been dropping in value since they hit a 2014 peak in June and members of Opec will discuss what changes need to be made to address this issue. The discussions will centre whether there needs to be output cuts to ensure that oil prices are pushed back up.
Venezuela and Iraq have already back the introduction of output cuts but the United Arab Emirates and Saudi Arabia seem reluctant to do the same. Saudi Arabia is the largest producer of the 12 Opec members but has stated that it will not push for an output cut, which would be the first since 2009.
Saudi oil minister Ali al-Naimi said that the oil market will "stabilise itself eventually", sentiments echoed by UAE oil minister Suhail bin Mohammed al-Mazroui who appeared to agree with his Saudi counterpart.
Speaking to Reuters, Mr al-Mazroui said that the "market will fix itself ultimately", adding: "We are not going to panic, this is not the first time, this is not a crisis that requires us to panic … we have seen [prices] way lower. We are not interested in the short fixes because we know they will not last."
One nation that has been hit by falling oil prices, attributed to the boom in US shale gas production, is Russia. The country's finance minister Anton Siluanov recently announced that the drop in oil price is costing Russia up to $100 billion a year.
However, the country, which is not an Opec member despite producing an estimated 11 per cent of global oil, said it not be co-operating with any production cut.
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