Collapse in Oil and Natural Gas Prices Hitting OPEC the Hardest
As prices for crude oil and natural gas continued their precipitous fall over the last five weeks, most commentators have been focusing on the impact — real or predicted — on the oil and gas industry in the United States. Little noticed, however, was the report from the U.S. Energy Information Administration (EIA) about how those declines are likely to affect OPEC.
OPEC’s total revenues, which hit an all-time high of $900 billion in 2012, are expected to decline by half next year, to just $446 billion. And that projection is based on the assumption that oil prices will average $68 a barrel in 2015. In the futures market on Friday, December 26, crude oil closed at $55.14 a barrel.
Last week alone, crude prices fell 4.2 percent. Over the last five weeks, crude cratered 28 percent — a breathtaking decline. Meanwhile, natural gas prices have dropped to $3 per million British thermal units (MBTU), a...