On Wednesday the price of Brent crude fell to 82.11 dollars, the lowest that it has been since November 2010.
“The difference between now and the last four years is the reluctance of Middle Eastern OPEC producers, primarily Saudi Arabia, to cut production to balance the market,” Amrita Sen, chief oil analyst at Energy Aspects, told CNBC Africa.
The Organization of the Petroleum Exporting Countries (OPEC) aims to coordinate and unify the petroleum policies of its member countries and ensure the stabilisation of oil markets in order to secure a regular supply of petroleum to consumers.
Sen said that although oil prices have started stimulating demand, it has also put a lot of future oil supply projects at risk.
“If prices had stayed at 100 dollars then yes we could definitely say that the world would need less OPEC oil because supplies would continue to grow,” she said.
“Maybe the world will need more OPEC oil in the second half of next year if low prices stay for longer.”
In 2013 the US surpassed Saudi Arabia as the largest oil producer in the world.
“Because of the US shale revolution, a lot more Latin American crude is also heading to Asia and they are discounting their crude to their market share,” said Sen.
“Moreover, a lot of the Asian refineries are actually geared to process more heavy crude oil which is cheaper so Latin America is actually gaining.”
The top four crude buyers in Asia – China, Japan, India and South Korea – are trying to reduce their dependence on Middle Eastern oil.
Sen added that this is not necessarily a good thing for West African oil producers as they will continue to face competition from Asia, which is trying to move away from middle east dependence.
OPEC is set to meet to discuss this on 27 November.