Oil prices have fallen closer to $50 per barrel over concerns that members from the Organisation of Petroleum Exporting Countries (OPEC) will fail to agree to reduce production of the commodity.
Iraq has said it does not want to participate with the proposed cut to production, and as the second-largest OPEC producer, its statement has sent oil prices lower.
According to Reuters, Iran, Nigeria and Libya could all be exempt from cutting production, while there is also talk that Venezuela and Indonesia could also avoid reducing their production.
All this comes after OPEC said it would approve a cut in oil production at its next regular meeting in Vienna in November.
Commenting on the latest development, Ole Hanson, Saxo Bank senior manager, said: “Something has been promised and if that promise cannot be fulfilled or delivered, then we obviously have a problem.”
Reports from the American Petroleum Association indicating a 4.8 million increase in US raw crude reserves last week also exerted downward pressure on the price of Brent crude.
OPEC is made up of 14 countries – the five founding members were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, with Qatar, Indonesia, Libya, the UAE, Algeria, Nigeria, Ecuador, Gabon and Angola all joining at various stages.
Earlier this month, OPEC secretary general HE Mohammed Sanusi Barkindo highlighted the need for greater investment in the oil sector during a talk at the Oil & Money Conference in London. He stressed that investment is needed to both develop new fields and tackle declines in existing fields.
Beam pump manufacturers may benefit if there is an increased focus on developing onshore oil fields.