Well, my friends I can confidently say that, it’s happening right in front of our eyes on the world market. Notably, it’s a tough time to rejoice with many of our favourite oil and gas stocks heading lower on lower energy prices and a general market pullback. But, really, you’ve got to sit back and really enjoy being an American in today’s energy market. As it is always stated “when America sneezes, the whole world catches Cold”, could this current development in the oil and gas industry be termed as such? Well, their new technology has made them come back hugely in the oil and gas industry as they begin to make prices of crude and gas fall drastically on the world market.
It’s not just Saudi Arabia rushing to lower oil prices. “State-run, National Iranian Oil Company of Iran” Bloomberg reports “cut official selling prices of its crude to buyers in Asia for November 2014 and beyond.” A situation that no one thought could happen any time soon.
Saudi Arabia and Iran rushing to lower oil prices? – Wow, this is indeed surprising and, certainly not a site you’ll see every day. Or even every decade! Other OPEC nations will likely follow too. Venezuela? Kuwait? Algeria? Nigeria? Angola? And the many OPEC nations? The bigger question is would they also begin to reduce their oil prices on the world market as Saudi Arabia and Iran are doing? What would be the effect on the world market price of Crude oil when they also move the same line as the former?
Today we live in a new oil world. Pressures on OPEC and its members and potentials in America which really threatens the very existence of the organization are really real today. This was the views of many experts in latter part of 2008 and today, these experts still hold on to their views and opinions. As I type or put this piece together, Brent Crude Oil and WTI Crude Oil trades hands at $85.04 and $81.84 a barrel respectively. Brent crude for December delivery is $89.
Technological breakthroughs – many pioneered by independent oil and gas producers – have triggered a “shale gale” that provides opportunities for the United States not only to reduce its dependence on imported oil but also to become an exporter of fossil fuels.
The powerful combination that sparked this revolution – horizontal drilling and hydraulic fracturing – is now being tested in shale formations around the world.
This new developments in the price of crude oil on the world market sets the platform for many questions to be asked. Would this bring OPEC and its members to an end for almost over 55years of existence? Will the role and influence of OPEC be lost completely? How will the members of OPEC operate and deal with other organizations outside theirs? Will this make things very difficult for countries like Iran, Iraq, and Venezuela among others to have it easy with the United States? This is indeed a difficult and challenging time and will go down deep in history so far as Crude Oil and Natural Gas is concerned.
The whole “end of OPEC” dialogue that you’ve heard murmuring in the background since 2008’s budding shale boom is really happening right in front of our eyes. Can this really be the case? But OPEC says, ‘‘You won’t see a tear from our muddy boot amigo, even though this is a really difficult times in the organization’’.
At the moment, what we can all do is to keep our fingers crossed and observe how OPEC and its members battles with America and the rest of the world!
Boye Nii Lantey Williams,
Student - MBA Petroleum Accounting and Finance,
University of Professional Studies, Accra (UPSA)
williamson20032001@yahoo.co.uk
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