Oil Prices Languish Below $45 A Barrel For The First Time This Year
Oil prices have languished below $45 a barrel for the first time this year indicating that efforts by OPEC and 10 other oil-producing countries to cut their production to reduce a supply glut and push prices higher are falling short. While Russia, Saudi Arabia and other nations involved in the deal have met their targeted cuts, an unforeseen increase in U.S. supply has countered these efforts. With the glut persisting, the outlook for oil prices has been dampened.
Brent crude was trading at $44.73 a barrel yesterday, leaving it further in a bear market, which is typically when there is a decline of more than 20 per cent from the most recent high. The price slide comes as US shale output is rising, and could affect Opec’s ability to balance supplies. Most traders believe the price will remain low until US shale drillers are forced to slow their expansion or OPEC agrees to make bigger supply cuts. BM