Oil fell this afternoon, at 3:40 pm London time, to its lowest level, US$75.45 a barrel, since September, when it reached US$96.55 a barrel, as US exports increase considerably and doubts about Whether OPEC+ will be able to meet planned production cuts raises concerns about an oversupply of crude oil.
Markets turned their attention Wednesday to U.S. government data on the country’s crude oil reserves and exports, to gauge how much the country’s supplies may be weighing on markets around the world. U.S. crude oil shipments are approaching a record 6 million barrels per day, according to estimates from ship tracking companies.
In another sign of abundant supply, an industry report said inventories rose last week in the United States.
Reflecting market weakness, Saudi Arabia reduced its official sales prices to Asia by the highest amount since February.
The decline in the price of oil since the Organization of the Petroleum Exporting Countries and its allies announced deeper production cuts last Thursday shows how difficult it may be for the cartel to balance the market in the first quarter. Futures have fallen by nearly a quarter since peaking in late September on concerns that increased production outside the cartel will outpace demand growth.
Russian President Vladimir Putin arrived in the United Arab Emirates today, on a quick visit that will also take him to Saudi Arabia. Although Russia threw its support behind last week’s OPEC+ cuts and Putin is expected to try to cement OPEC+ ties with its partners in Saudi Arabia and the United Arab Emirates, markets remain pessimistic about OPEC+’s ability to increase prices through cuts in oil production.
By Economic Editor