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DUBAI STATE-CONTROLLED OIL firm Dragon Oil has dropped a bid for rival firm Petroceltic as the price of the commodity hit a 5-year low.
Dragon Oil, which is majority owned by the Dubai government’s Emirates National Oil Company (ENOC), today abandoned plans for a buyout of the Dublin-headquartered company which was going to be worth about €627 million.
It said it no longer planned to make an offer for Petroceltic “in light of prevailing market conditions”.
Oil- and gas-producer Petroceltic previously said it was waiting for ENOC to sign off on a formal offer before the possible buyout went any further.
The news came as the price for Brent crude oil hit its lowest ebb in 5 years with the per-barrel price continuing to fall off a cliff while the product continues to flood into the market. The price for the commodity, which is the benchmark for about two-thirds of the oil market, dropped below $69 (€55.42) a barrel today before rebounding slightly.
The once-dominant OPEC alliance, made up of big oil producers like Iran, Iraq and Saudi Arabia, has been under pressure to react to a global glut in the commodity, mainly thanks to a boom in US production from shale oil fields.
But last week, instead of cutting output in an attempt to push up oil prices, OPEC chose to keep pumping out the same volume it has been for the past three years.
Analysts said the move will put pressure on other producers who can’t compete at the lower prices and will also stall exploration and development of new wells.
Meanwhile, Petroceltic said most of its current production was sold at fixed gas rices in Egypt and was not affected by “short-term oil price volatility”.
Will the cartels drop their petrol prices at the pump…. A close eye should be kept on them.
The biggest cartel are the governments who take 50% tax… then the thick greens added another 23c carbon tax because you know the dearer the fuel is somehow magically makes it cleaner.
Prices seem to be down about 10c-15c at the pumps.
You might think it should be down by 30%, but the government duty doesn’t change, so it can only fall by 30% of the producers price.
141.9 – 147.9 at the moment for petrol hasn’t changed much. It was that last year. How quickly will they pass on the savings this time.
1.47.9 at 110 dollars a barrel. For the last few months it’s been almost halved per barrel but we still pay the higher price.
I chose to study Civil Engineering just as the investment in infrastructure in Ireland was essentially nulified. I’m over in Edinburgh now studying a Masters in Petroleum Engineering as we hit “Peak Oil” production. The jobs market in the North Sea will essentially be zero due to this fall in oil prices this year. I’ll promise never to try to study anything banking related as it may be a bad omen for all. :)
Lucky Scotland voted no then..
The world is your oyster Robbie, go for it and the very best of luck to you :-)
Oil is a much manipulated commodity as evidenced by the ability of OPEC to influence price by turning supply up or down.
In my opinion the USA has cut a deal with the Saudis to oversupply the market while economic sanctions are on Riussia and to a lesser extent Iran.The Saudi regime knows that it needs US backing to remain in power so
when Uncle sam says drop the price of crude, they’ll likely say by how much sir?
Just imagine if oil were to be $100/bbl and the Rouble where it is now, how much loot would the Ruskies be making
to offset the effect of Western economic sanctions?
I’m not sure this is a deal with the US.
The US has been systematically trying to reduce its dependence on imported oil in recent years. Part of the strategy for this has been shale oil, tar sand extraction in Canada plus pipelines, etc.
What OPEC can do by dropping the price is to reduce the economic viability of non-traditional oil sources. That makes deep ground-based extraction, deep sea extraction, risky bets like the seas around Ireland, all not worth doing, as the cost of expoloration/extraction will negate any revenues.
The OPEC members can extract their oil far more easily, and therefore cheaply, and want to ensure that their slide of the market is maintained. They can do this by pumping up production.
Hi Ronan,
It seems that the timing is right for my theory. Just look at the progressive drop in the price of crude since the US announcement of sanctions on Russia.
If OPEC had been that concerned about competition from US shale oil then it would have upped production and dropped price 18 months ago before the US got to this stage in petroleum self sufficiency.
Cheers
Brian
Brisbane
a falling crude oil price deters investment in expensive unconventional sources guaranteeing even higher future oil prices
Why aren’t the airlines lowering their fuel surcharge prices?
The real reason the U.S. is so interested in oil production and oil related products has only in small part got to do with the production of oil. It is mostly to do with the fact that all oil is traded in dollars this product’s a huge foreign currency trade for the us.
I read somewhere (zerohedge I think) that the last time oil dropped by greater than 40% it triggered the 2008 crash..
Hopefully not…
Watch this space.
A barrel of oil is sold 25 times before it reaches our shores – or petrol tanks , (can’t remember which )
Fracking paid off for the US as did investment in tar sands,long may technology keep us progressing.
The US imports very little oil from the middle east by the way.
Isis strikes again !
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