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U.S. Oil Prices Sag Below $27 Per Barrel
The price of the U.S. oil benchmark, West Texas Intermediate, fell nearly 7% on Wednesday to close at $26.55 per barrel, its lowest price in more than 12 years.
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The price of the U.S. oil benchmark, West Texas Intermediate, fell nearly 7% on Wednesday to close at $26.55 per barrel, its lowest price in more than 12 years.
The international petroleum standard, Brent crude, dropped 3% to $27.10, also a 12-year low.
Traders predict further declines as the already-glutted oil market roils over Iran’s return to the legitimate oil exporting market. Analysts say the world currently is pumping about 1 million more barrels of crude oil than it consumes.
The result is an inventory of some 1 billion barrels of unused oil, according to the Paris-based International Energy Agency. IEA predicts the excess supply will expand by 285 million barrels by the end of this year, thanks to a sluggish global economy and the reluctance of oil producers to cut output.
The Organization of the Petroleum Exporting Countries, which accounts for roughly 40% of the world’s oil production, expects oil prices to stabilize this year. The cartel forecasts petroleum prices will rise to $70 per barrel by 2020.
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