Published on : Aug 14, 2015
Oil prices in the U.S. have dropped to their lowest in six years on Thursday. The increase in crude oil supplies, the concern regarding the growth of the global economy to the dollar, and the outage of a major U.S. refinery have all led to the price drop.
There is a 2.5% drop for light sweet crude in September’s delivery. The price fell by US$ 1.01 to US$42.23 per barrel. The price dropped lower than the previous low point in the year set on Tuesday. It is now at its lowest since March 3, 2009.
This is the latest bad news for those wary of oil prices, which have been highly turbulent for 14 months. The oil prices started falling after a surge in the U.S. production of crude and the refusal of global oil companies and groups to reduce the production of crude. The resultant oversupply of crude oil has let its price drop to its current six-year low.
The benchmark for oil prices in the U.S. has now dropped over 31% after the highest point in the early week of June. It has slumped down over 60% after June of 2014. The global oil cartel has continued to maintain high levels of oil production. Their efforts are to maintain their market share over curbing the growing oil prices.
Analysts believe that there is a very low chance of crude oil productions being reversed and that the price could possibly fall below US$40 per barrel.
The Shork Group president Stephen Shork, said that oil is now being traded at levels that were previously unseen after the great depression.
More analysts on Thursday expressed their concern over major macroeconomic factors such as the industrial growth in China and a strengthening dollar.