Both US crude and Brent have tumbled further in Asia against the background of an oversaturated market and current OPEC policies. But energy giant BP sees demand for fossil fuels rising over the next two decades.
Image: picture-alliance/dpa/W. Hong
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US crude fell below $27 (24 euros) per barrel in Asia on Thursday against the backdrop of an exacerbated oil glut due to high US inventories and increased output from OPEC member countries.
The renewed decline came despite the weekly US Department of Energy report showing US oil stocks dropping recently, but from levels too high to change the big picture.
Brent crude for April fell 14 cents to $30.70. "Swollen crude inventories in the US are putting increased downward pressure on the price of WTI, increasing its differential to the international benchmark Brent," BMI Research said in a note.
Sun setting on Aberdeen’s oil industry
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Patience required
The renewed drop in oil prices came a day after energy giant BP presented its Energy Outlook 2035. In it, the company predicted growing energy demand globally over the next 20 years.
BP noted there would no doubt be a marked decline in coal consumption mostly for environmental reasons. But it emphasized that "the slump in coal will not shift fossil fuels from their dominant role in global energy production."
The report expected gas consumption to rise by 1.8 percent, while oil demand would go up by 0.9 percent over the next two decades.
BP added that global oil supply was forecast to expand by nearly 19 million barrels per day, mainly led by growth outside OPEC.
Hit hard by sinking oil prices
Prices for crude oil are reaching new lows almost daily due to oversupply and unease over the global economy. Some countries have been hit harder than others.
Image: picture-alliance/dpa/W. Hong
A great, big hangover
Even Norway isn't immune to the falling price of oil. For years, the wealthy Scandinavian nation had fueled its rapid growth with the oil it pumped out of the North Sea. But what once transformed a poor agrarian state into one of the richest countries in the world now has policymakers wondering if it wouldn't be wiser to allocate more resources to Norway's fishing industry.
Image: picture-alliance/dpa/O. Hagen
Double trouble
For Russia, the falling price of oil has added insult to injury as its economy is already reeling under Western sanctions. In 2015, economic output in the country shrunk by around 4 percent. As a result, salaries have dropped and the ruble has lost half of its value against the dollar. The news service Bloomberg estimates that 2016 will be another recessionary year for Russia.
Image: Getty Images/AFP/A. Druzhinin
An uncertain future
Nigeria is Africa's largest producer of oil. Before being elected president, Muhammadu Buhari announced that he would increase government spending - but the drop in the price of oil may make that promise impossible to fulfill. The World Bank estimates that three-quarters of the Nigerian state's revenues come from the oil business. Many infrastructure projects are currently on hold.
Image: picture-alliance/dpa
New realities
Nigeria's not the only country that calculates its budget based on the price of oil staying high. The result has been a big gap between expected and actual revenues. The price for a barrel of oil has dropped by nearly 75 percent since mid-2014. Many experts currently have little reason to believe the per-barrel price will return to its old level of $120 (110.76 euros) anytime soon.
After sanctions
Now that sanctions against Iranian exporters have been lifted, the Islamic Republic plans to ramp up its oil production by half a million barrels a day - putting further pressure on an already oversupplied energy market. Iran, for its part, blames its archrival Saudi Arabia for falling oil prices.
Image: picture-alliance/dpa/A. Taherkenareh
Less giving, more taking
Saudi Arabia has refused to curb oil output in order to protect its market share from competition from the US fracking industry and Iran. But now, even the world's largest oil exporter is starting to get a taste of its own medicine. The International Monetary Fund is warning about a massive impending budget deficit. The Saudis want to introduce taxes and slash energy and food subsidies.
Image: picture-alliance/dpa/P. Grimm
How long will reserves last?
Like their Saudi counterparts, other oil-rich Gulf statessuch as Qatar, Oman and the United Arab Emirates are also watching their energy reserves dwindle. These regional powers all boast large sovereign wealth funds - but altogether, the six Gulf states have already accumulated a budget deficit worth $260 billion (239.8 billion euros), according to estimates by JP Morgan Chase.
Image: M. Naamani//AFP/Getty Images
Winds of change in Venezuela?
Venezuela has the largest oil reserves in the world. For years, the country's socialist government used revenues from the sale of oil to fund its lavish social programs. Now, President Nicolas Maduro has declared a state of emergency for the Venezuelan economy. Popular support for the successor to Hugo Chavez has been slipping for about a year - about as quickly as the price of oil has dropped.
Image: Reuters
What now?
Thanks to a boost in shale gas extraction, aka fracking, the US is now the world's largest energy producer. Low oil prices, however, have made fracking widely unprofitable. The US is also one of the largest consumers of energy in the world. While motorists may celebrate having to spend less money at the pump, bigger, gas-guzzling vehicles are gaining in popularity - bad news for the environment.
