US crude prices slumped below $27 on Thursday as traders digested further worrying statistics for the market
US crude prices slumped below $27 on Thursday as traders digested further worrying statistics for the market.
Latest figures from the US government, released on Wednesday, confirmed a new record high for stockpiles which are now said to be at the highest level for eighty years.
Elsewhere on Thursday there was yet more conjecture and commentary regarding the possibility that some sort of cooperation could be reached between major oil producing nations.
It is a debate that has been going on some time, and given that crude benchmarks continue to languish it would appear that a consensus has yet to be reached among traders or oil market experts.
In London trading, Brent crude futures were down 1.4% at $30.40 per barrel while West Texas Intermediary was 2.5% lower at $26.80.
Yesterday, The International Energy Agency (IEA) said a supply glut at the start of 2016 is unlikely to fall for most of the year as reductions in US output take time and members of oil cartel Opec drag their heels on cutting output.
The IEA trimmed its forecast for increases in 2016 oil demand, which now stands at 1.17mln barrels per day (bpd) following a five-year high of 1.6mln in 2015.
It added that it did not envisage oil prices falling as low as US$10 a barrel, although it was equally difficult to see how they could rise significantly.
Oxford University professor Dieter Helm said he believed companies should be ready for the possibility that prices may never return to the US$100 level they reached until late 2014.
He told the Week conference in London that shale oil was likely to keep stocks plentiful despite a potential fall in demand as electric car technology progresses.