Oil Tumbles After Kuwait Tumbles

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Oil prices fell on Tuesday after Kuwait said it would only participate in an output cap if all major producers, including Iran, cooperated.

“I’ll go full power if there’s no agreement. Every barrel I produce I’ll sell,” said Anas al-Saleh on Tuesday.

Kuwait, a member of the Organization of Petroleum Exporting Countries (OPEC), is currently producing 3 million barrels of oil per day.

In a related development, representatives from oil producers in Latin America will be meeting on Friday to discuss a strategy to address the 20-month oil glut.

Kuwait’s non-commitment, however, isn’t the only factor adding pressure to oil prices. Goldman Sachs analysts on Tuesday said that the recent rally in commodity prices was premature and unsustainable in current market conditions.

“Energy needs lower prices to maintain financial stress to finish the rebalancing process; otherwise, an oil price rally will prove self-defeating, as it did last spring.”

Meanwhile, China’s vehicle sales figures last month dropped 3.7% compared to the same month last year, according to data from the China’s Passenger Car Association. Vehicle sales typically reflect the demand for gasoline in the country.

Jacob Maslow is a native New Yorker with  five children. He left his payroll manager position after finding that his true passion was in writing, and has never looked back.

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