OPEC's decision not to cut production continues to reverberate through global oil markets, with the price of Europe's benchmark Brent crude falling to a four-year low today — bad news for petroleum exporters in the Middle East and Russia, but good news for nearly everyone else.
Brent crude oil steadied at about $73 a barrel on Friday after reaching a low of $71.12, its lowest level since July 2010, according to Reuters.
Igor Sechin, the head of Russia's Rosneft, says he thinks oil prices will average $70-75 per barrel through 2015. That prediction was in line with what Bill Hubard, chief economist at Markets.com, told Reuters: "I think $70 a barrel will be the new norm. We could see oil go considerably lower."
NPR's Corey Flintoff says that the Russian government gets about half of its revenue from oil and gas exports, "so it stands to lose a lot of money when prices go down."
According to Bloomberg, the Russian oil giant has lost 38 percent of its market value this year.
The New York Times reported after the conclusion of the Organization of Petroleum Exporting Countries' meeting in Vienna on Thursday:
A more than 30 percent decline in prices in recent months has shaken the 12-member group. For three years, OPEC had little trouble keeping prices in the $100-a-barrel range that many of its members consider satisfactory.
But markets have spun out of OPEC's control of late. Prices have come under pressure as global output of crude oil outstripped demand this year. Analysts forecast excess supplies of crude to continue to build in 2015.
The main new source of supply is oil extracted from shale in the United States, which is expected to add about one million barrels a day of oil production this year and an additional one million barrels a day in 2015.