Oil price falls below $30 a barrel on international markets

    Oil price falls below $30 a barrel on international markets

    Jan 14, Moscow: Oil prices have briefly fallen below $30 a barrel on international markets for the first time since April 2004, before recovering again, media reports said. Oil prices have fallen by 70 percent in the past 15 months.

    Brent crude, used as an international benchmark, fell as low as $29.96, but bounced back to trade at $30.22.

    Earnings are down for companies that have made record profits in recent years, leading them to decommission roughly two-thirds of their rigs and sharply cut investments in exploration and production. An estimated250,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply, New York Times report said.

    The cause is the plunging price of a barrel of oil, which has been cut roughly by more than 60 percent since the June 2014.

    Prices have recovered a few times last year, but a barrel of oil has already sunk this year to its lowest level since 2004. Executives think it will be years before oil returns to $90 or $100 a barrel, pretty much the norm over the last decade.

    The 2016 federal budget that was approved in October was based on an oil price of $50 a barrel in 2016 - a figure Russian President Vladimir Putin has since described as "unrealistic".

    Government departments have been ordered to cut spending by 10 percent, repeating a policy imposed in 2015, Reuters reported.
    Pensions and pay for government workers will be protected from the cuts, which could save as much as 700bn roubles (£6.3bn; $9.1bn).

    The Oslo Times