New oil price slump mars Ministers’ holidays

In a repeat of the plunge at the year’s beginning, global crude oil prices dropped below the psychological $50-mark per barrel, from around $115 last year — this time in the wake of the Iran nuclear deal last month.

The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $48.40 a barrel of nearly 160 liters on the previous trading day on Monday.

The International Energy Agency has said that Iran has at least 17 million barrels of crude oil stored and ready to be shipped.

The markets expected OPEC’s crude production to hit a high in July. In June, OPEC production increased by 283,000 barrels per day to 31.38 million barrels per day, a three-year high, according to OPEC monthly oil market report on Monday.

US oil companies added more oil rigs this week despite the collapse in crude prices, marking the second straight week of an up-tick in the rig count.

Economist Kamel Dib underlined in a statement to “Echorouk” that Algeria’s financial balance is in danger because oil prices dropped to levels lower than the Government has been expecting, and predicted continued decline during the month of August.

He surmised in this connection that in early September the oil price may dip to as low as $45 a barrel thus denting further in Algeria’s overall export earnings which would reach 33 billion dollars at best by the end of this year, prompting the Algerian government to gear up for the dire expectation of freezing basic development projects if this bleak situation continued unabated.

Mr Kamel Dib also did not exclude the intention by several member-states of the Organization of petroleum exporting countries (OPEC) including Algeria to stage an extraordinary meeting soon to discuss the current volatile situation gripping the world oil the market, after the return of Iran’s sizable oil exports after the lifting of western sanctions on that country in the wake of its nuclear deal with world powers.

He also forecast a further slump in the price of a barrel of oil to as low as $45 beginning next September, which he said does not bode well and may push Algeria to resort to foreign borrowing to carry through the financing of pending development projects.