While a strong dollar and global growth concerns—slowdown worries in China, sluggish growth in Japan, and recessionary fears in Europe—are some of the factors behind the slump in demand, the U.S. shale gas boom has boosted U.S. oil output to the highest level in 30 years.
As a consequence to this increase in demand, oil from Saudi Arabia, Nigeria, and Algeria once sold in the U.S. are now competing in the growing Asian markets. Canadian and Iraqi oil exports have been rising continuously year after year, and even Russian production has managed to stay steady, despite the country’s economic problems.
Despite signs that production is falling—back in February, OPEC membersSaudi Arabia, Venezuela, and Qatar, along with Russia, announced a plan to freeze output at current levels—it was reported that a meeting between OPEC and non-OPEC countries is now unlikely to happen since Iran has not committed to halt its production levels. This is not entirely surprising, as OPEC members in the past seemed to have been unable to agree on the best policy for dealing with the oil slide, and how to progress from this stalemate.
