Global oil prices plummeted Tuesday after Iraq reduced
the price for its Basrah Light crude to Asia, the lowest in at least 11 years. Iraq
is the second-largest producer in the OPEC.
Brent for January settlement declined as much as 90
cents to $65.29 a barrel on the London-based ICE Futures Europe exchange and
was at $65.74 at 4:12 p.m. Singapore time. WTI for January delivery decreased
as much as 80 cents, or 1.3 percent, to $62.25 a barrel in electronic trading
on the New York Mercantile Exchange.
Globally, economists project that countries with
high fuel import bills like Japan and China should benefit from lower energy
costs. India and Indonesia have already been able to shave subsidies on
gasoline to reduce their burdensome fiscal deficits.
But for oil-producing countries like Russia,
Venezuela, Nigeria and Iran, falling oil prices threaten their government
programs, currencies and ability to pay debts.
The drop in oil prices may even hurt natural gas
exporting countries since gas prices are often tied to oil prices in European
and Asian markets. Along with a projected supply surge between 2015 and 2019,
lower prices could jeopardize several large proposed liquefied natural gas
export projects in the United States and Canada.
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