The price of oil dipped on Tuesday, October 25 as disagreements emerges within the Organisation of Petroleum Exporting Countries (OPEC) about who should cut which amount of production in a planned output reduction to bolster prices.
The U.S. dollar, which was at a high of almost nine months, also contributed to the reduction in oil prices. A strong dollar makes a number of commodities, including oil, more expensive for people dealing in other currencies.
On Tuesday, global Brent crude futures dropped by 8¢ to $51.38 (£42.03) per barrel at 5:28 am GMT, while WTI crude futures were down just 1¢ to $50.51 (£41.32) per barrel.
Speaking on Sunday, October 23, Jabar Sli al-Luaibi – the oil minister of Iraq, which is OPEC’s second biggest producing country – said that he wanted the country to be exempt from the curbs on oil output as the country required more money to take on Islamic State militants.
According to ANZ bank, speaking on Tuesday:
“Crude oil prices labored under the weight of various OPEC members seeking exemption from the production cut agreement.”
Until further light is shed on the planned oil output cut, which OPEC hopes will be put into place in conjunction with nonmembers such as Russia, analysts have said that oil prices will probably remain-range-bound, but volatile at approximately current levels.
Increasing oil prices is something that is important for everyone from OPEC members, to the likes of Fuchs, who produce, Fuchs Reniso C85E, as they all want to see a string recovery after prices hit an all-time low in January this year.