New York’s West Texas Intermediate for January hit a similar low at $36.64 on Tuesday, having already breached $40 last week.
Advertisement
American motorists are feeling the benefit at the pump, with the average price of a gallon of gas also falling to its lowest level since 2009.
On the demand side, China’s crude oil imports for the first 11 months of the year rose 8.7 percent to 6.61 million barrels per day, with November crude imports growing 7.6 percent from the same month a year ago. Oil slumped after OPEC last week failed to agree a cut in production quotas in the face of tumbling prices and a mounting global supply glut.
A short-term market report from the U.S. Energy Information Administration found lower crude oil prices were curbing total U.S. output.
Oil prices tumbled early in the session after weak Chinese trade data underscored worries about slowing global growth.
The U.S. Department of Energy predicts that U.S. shale oil production will drop by 116,000 barrels in January.
Iranian Oil Minister Bijan Namdar Zanganeh said Friday that the crude market is oversupplied by 2 million barrels a day, adding that the country planned to increase exports by 1 million barrels a day after sanctions are lifted.
Several OPEC sources told the news wire that the group’s members decided that dropping reference to the output ceiling, rather than raising its production target, would have less of a negative impact on crude prices.
Oil supply is now more than demand – the stagnation and recession in many Eurozone countries has forced industry and governments to scale back imports.
U.S. crude was supported by a surprise 1.9-million-barrel fall in USA crude inventories to 488-million barrels last week.
Though Ghana also benefits from the drop in the price of oil on the world market because it is a net importer of the commodity its current economic challenges will only worsen if its revenue base continue to decline as two other commodities it relies on that is gold and cocoa are also not doing too well on the global market.
The 13-member OPEC now produces about 31.5 million barrels a day and has refused to cut its output, which made traders worry that the prolonged supply glut would continue to drag the oil market down.
Advertisement
Banks such as Goldman Sachs have said oil could fall to as low as United States dollars 20 per barrel as the world might run out of storage to place unwanted crude.
