Future of North Sea oil industry is on a precipice if Saudis let prices slide to $20-barrel

oil desertBy PETER STRACHAN and ALEX RUSSELL

Predicting oil price movements is as risky as exploring for oil itself.

The average price for crude fell 10.3% from the start of 2014 to the date of the Scottish independence referendum on September 18. It fluctuated over this period – but few, if any, were predicting any major move in either direction in the months to follow.

Yet during the past three months we have seen another 48.4% fall. Geopolitical factors involving OPEC, the US, Russia and Iran, as well as the economic decline of China and the Eurozone, have been touted as contributory causes.

Whatever the reason, the trend looks set to continue well into 2015, with Saudi Arabia prepared to run a substantial budget deficit and let the price fall to $20 a barrel to win back its market share.

 

Read the full article in Scottish Energy News: http://goo.gl/qxW8AR

Meanwhile, Brent crude – the North Sea benchmark – slid below $50-barrel in trading yesterday, but recovered slightly to close the day at $50.78-barrel.

 

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