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Falling oil prices are hurting the major oil producers

by investor on 26/11/08 at 1:35 pm

After throwing a wrench into Canada’s oil sands growth and messing up Alberta’s budget surplus, slumping oil prices are beginning to bite into the government budgets of many OPEC members, Tristone Capital Inc. said in a report.

The Calgary-based energy investment dealer said Tuesday cartel outliers Iran and Venezuela are in the toughest spot, requiring oil at US$90 a barrel for their budgets to break even next year, while Nigeria and Bahrain need crude above US$70 a barrel.

Even producers in the Arabian Gulf are getting close to the oil price they need — US$50 a barrel — for their government budgets to break even. Oil settled at US$50.75 a barrel in New York Tuesday, down US$3.75 on worries the U.S. Energy Department will reveal a growth in oil inventories Wednesday, and down nearly US$100 since mid-July.

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