Falling oil prices hit Middle East producers - The Age

THE drop in oil prices is reducing income in the Middle East and threatening the economic stability of producing countries, said the Oil Minister of Qatar, the world's largest supplier of liquefied natural gas.

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"For the first time in a quarter century, world demand for oil is falling; the price has collapsed since July 2008," Abdullah Bin Hamad Al-Attiyah said at the Asia Ministerial Energy Roundtable in Tokyo yesterday. "Companies almost everywhere are freezing investment and re-evaluating energy projects based on high prices." Crude oil traded in New York has fallen 65 per cent from $US147.27 a barrel on July 11. LNG prices are set using a formula based on the price of crude. The number of oil and gas rigs operating worldwide has plunged 34 per cent since September following the drop in prices, according to data published by Baker Hughes Inc. Qatar approved a budget on April 4 that forecasts the country's first deficit this decade. The oil and gas market presented a "high-level risk" to investors in projects, Mr Al-Attiyah said, and governments must frame policies to help protect their investments.

Full Story: Falling oil prices hit Middle East producers - The Age