Oil prices slumped to 2018 lows on Friday in choppy trading, pulled down by an emerging crude supply overhang amid a bleak outlook, according to Reuters.
The fall came even as markets expected Opec countries to start withholding supply after the producer organisation recently announced that collective efforts to cut output in an effort to stabilise plunging prices would top the agenda of an upcoming meeting.
International benchmark Brent crude oil futures hit their lowest since December 2017 at $61.52 a barrel, before recovering to $61.88 earlier today.
The 72 cents drop against Brent’s last close heralds a significant shrinking in yield and is expected to definitely force Opec’s hand when members meet on December 6.
Of interest is the price of Western Texas Intermediate (WTI), usually priced at around $10 per barrel lower than Brent, which held its ground, only slumping to $53.29.
Reuters said the divergence between US and international crude came as surging North American supply was clogging the system and depressing prices there, while global markets were somewhat tighter, in part because of reduced exports from Iran due to newly imposed sanctions by the States.
Leading Opec country Saudi Arabia has said that it remains committed to slashing supply by 1.4 million barrels per day as the year winds to a close.
US investment bank Morgan Stanley said whatever was decided in December, price margins were most likely to remain in the 50s because of the current glut of oil in the market.
