This morning, the oil prices fell yet again following a rally which saw the price of Brent crude rose by approximately eight percent last Wednesday.
Brent crude, the international standard, dropped by approximately one percent to $53.92 per barrel in the early morning as the heightened concerns over the increased supply of oil and poor global economic conditions helped relieve the upward pressure that is experienced from the stock market.
Yesterday, the prices increased by around eight percent to $54.47 as a surge in the stock market placed the wind in the sails of commodity investors.
Meanwhile, West Texas Intermediate (WTI), the standard of the United States, dropped by approximately half a percent this morning to $45.96, following a rise of 8.7 percent yesterday.
Both standards are down by approximately 40 percent since hitting the year-highs that were recorded last October.
The prices have been placed under pressure by high production in Russia, the Kingdom of Saudi Arabia, and the United States of America, with all countries coming close to, or surpassing, their record output.
Earlier this month, Opec, the oil producers’ cartel, said that it would be reducing its output by 1.2 million barrels per day in an attempt to stabilise the price of Brent at approximately $60 per barrel. However, the oil prices have still declined further since then. The cuts are set to come into force at the start of the coming year.
A market analyst for CMC Markets in Singapore, Margaret Yang, stated: “Markets need more concrete evidence on improving fundamental metrics and to bring the supply-demand relationship back to balance before oil prices can reach a real bottom.”
An analyst at Samsung Securities in Seoul, Shim Hye-jin, stated: “If Opec’s cuts are fulfilled, WTI prices are expected to rise to $50-60 a barrel, while Brent is expected to go up to between $58-70 a barrel next year.”