Reports say the spot price of crude oil has dropped approximately 55% in the last 6-7 months due to current supply exceeding the nominal demand of 92 million barrels per day by 1.5-2 million barrels per day.
A number of planned oil and natural gas (O&G) projects globally have been cancelled or delayed, O&G sector capital expenditure budgets are being revised and trimmed, drilling rigs are being laid down, and workers are being laid off. At least one oil producing country appears to be teetering on the edge of default.
A concurrent slowdown in global growth (aside from the US) along with the impacts from crude oil price drop has seriously rattled stock markets globally with the O&G sector companies being the hardest hit.
OPEC oil ministers left and right are talking down the price of oil and stating emphatically that OPEC, and Saudi Arabia in particular, will not intervene (cut production) in order to halt the drop in price.
No OPEC production cuts will be forthcoming. One of the comments from a Saudi businessman a couple days ago really caught my attention.
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