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Oil Prices Continue to Slide
Oil futures dropped again to new five-year lows yesterday as reports signal that lower demand and higher surpluses lie ahead.
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Oil futures dropped again to new five-year lows yesterday as reports signal that lower demand and higher surpluses lie ahead.
On Wednesday the U.S. benchmark for petroleum (West Texas Intermediate) fell 5% to $60.94 per barrel. The overseas benchmark (Brent crude) slid 4% to $64.24. Both settlement prices are the lowest since July 2009.
The decline was fueled in part by news that the Organization of the Petroleum Exporting Countries now expects demand for its oil in 2015 to average 28.9 million barrels per day, down 300,000 bpd from its previous forecast. Last month the cartel, which pumps 40% of the world's petroleum, agree to continue producing crude at 30 million bpd.
Traders also were surprised by U.S. Energy Information Agency data showing a slight increase in U.S. petroleum stockpiles last week. The EIA sharply lowered its estimates for next year's average prices for West Texas Intermediate (-19% to $62.75) and Brent crude (-18% to $68.08.
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