Low-production costs, need for revenue keep oil producers pumping, even in saturated market: economist

Newswise — HAMILTON, Jan. 14, 2016 – Plummeting prices in the world’s saturated oil markets have analysts wondering where the floor is, even as many countries continue to add to the surplus, seemingly cutting their own throats. Economist Atif Kubursi is available to explain the reasons why oil producers appear to be hurting themselves, and why the free fall must finally end. “This cannot go on forever. Someone will blink soon — most probably U.S. and Canadian shale producers,” says Kubursi, an economist, former under-secretary to the United Nations and advisor to OPEC. “Even at record low prices, some oil-producing countries are still making money. Saudi Arabia, Qatar, Kuwait, UAE and Iran have very low marginal production costs and prices are still above their revenue break-even thresholds.” “What is also at work here is that as prices dip lower, some oil producers are pumping more oil to raise more revenues. They have to raise revenue to meet escalating demands and finance extravagant demands and military adventures.”Atif Kubursi can be reached directly at 905-334-1745 and [email protected].-30-

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