by Ameera Fouad
US Crude oil sank by more than 3 per cent last Thursday in one of its lowest falls in six years, hitting an intraday low of $41.35 per barrel, marking its lowest point since March 4, 2009.
Within the highest production of OPEC in three years and as Iran is pumping more crude oil, US crude supplies which always hit 100 million barrels, in its seasonal average, had been slowed down to decline as prices fell by more than half.
US Crude oil details:
Prices are down 21 per cent this year as West Texas Intermediate for September delivery fell 1.07 cents to settle at $42.23 a barrel on the New York Mercantile Exchange.
Brent dropped 44 cents to settle at $49.22 a barrel on the London-based ICE Futures Europe exchange.
October futures slipped 55 cents to $49.63.
Due to refinery outages sapping US demand, US crude has become much weaker than the North Sea benchmark. The largest of those refineries – BP’s (BP.L) 413,500-barrels-per-day (bpd) facility in Whiting, Indiana, shut two-thirds of its capacity for repairs that could last a month or more.
Analysts said prices could drop further still unless oil production started to fall, particularly in North America.
But will the US supply put on the brakes? It is believed that US shale players are actively cutting costs and some players are profitable at less than $30 per barrel.
On the demand side, China’s crude oil imports have so far remained strong as authorities build up strategic reserves and consumers keep spending despite the slowing economy.
