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Oil Prices by far the Lowest in Six Years

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Published on : Jan 27, 2015

In almost six years, the amount of oil traded reached the lowest levels since the OPEC’s warning that prices may rise without new investment in production that failed to shift the focus of the market from more immediate signs of a global supply glut. As per the OPEC Secretary-General Abdalla El-Badri changes in futures were quite low in New York after declining 1% on Monday. A hike to US$200 per barrel is possible without expenditure for the long term. 

The U.S. crude inventories perhaps increased to 402.1 million barrels the week earlier, the maximum as per records that dates back to the month of August 1982.Last year, the prices of oil declined close to 50% amid the most rapid pace of the U.S. crude production in greater than thirty years and as the same time, the Organization of Petroleum Exporting Countries did not support calls for reducing output. According to Gary Cohn, the president of Goldman Sachs Group Inc. prices may decrease to as low as US$30 per barrel. 

A resource analyst at Fat Prophets, Sydney expressed that Supply is still the main problem, which needs to be brought under control. The potential is still for the downside in the near term since there is a need to see a decline in current production. Demand doesn’t show immediate improvements on the falling price, and it does take time to exhibit the desired effects.  For the March settlement, Brent was high by 8 cents that led to the pricing at US$48.24 per barrel at the London based ICE Futures Europe Exchange.