Oil price tumbles to $39.74 over collapse of oil freeze, Kuwait strike

CRUDE oil price fell to 7 percent on Monday after oil majors from the Organization of the Petroleum Exporting Countries(OPEC) and non- OPEC Russia failed to reach agreement on a plan to freeze output.

Oil price hit about $42 last week, raising hope that the black gold may see a rebound in coming weeks.

The producers had gathered in Qatar, Doha at the weekend for what was expected to be the rubber-stamping of a deal to stabilise output at January levels until October. The deal crumbled when OPEC heavyweight Saudi Arabia demanded Iran join the plan, despite Tehran’s repeated assertions it would not. This is even as Kuwaiti workers’ strike slashed the country’s oil output by more than half, offsetting worries about a scuttled plan by major oil producers to freeze production.

The strike cut more than 60 percent Kuwait’s crude output, lending support to price benchmarks such as Brent and Dubai. Supply of refined oil product from the country also tightened due to scaled-back refinery runs and lower fuel exports.

Meanwhile,the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation(NNPC) Dr. Ibe Kachikwu, has assured that despite the stalemate on crude oil production freeze, OPEC will continue to work to achieve consensus for output freeze among oil producers.

Addressing newsmen after the protracted meeting of OPEC and non-OPEC oil producers held under the aegis of Oil-Producing Countries Ministerial Meeting in Doha, Qatar, Kachikwu stressed that OPEC must work at achieving a workable consensus on the issue by bringing everybody on the negotiating table.