Brent crude prices, the global oil benchmark, dropped below $80 per barrel, first time since Sept 2010.
After testing the $80 per barrel mark in the day, Brent prices dipped by as much as 2.2% to $79.88 on Wednesday afternoon.
According to Financial Times, US oil benchmark, WTI prices, dropped 1% to $77.18 after falling through $80 last week.
This adds to concerns about the global glut of oil and the outweighing news of a drop in crude production in Saudi Arabia in October. Production at the largest oil field in Libya restarted after being forced to shut down last week. An official reported that it is pumping more than 100,000 barrels per day.
Production in Libya has soared in the recent months to 900,000 barrels per day from less than 200,000 barrels per day. The high output in Libya is a key factor that has seen prices of oil plunge from mid June.
The Wall Street Journal reports that light, sweet crude for December delivery dropped recently 1.25 or 94 cents to $77.00 a barrel on the New York Mercantile Exchange on track to settle at a low of three years.
The global benchmark, Brent, recently dropped 0.9% or 74 cents to $80.93 per barrel on the ICE Futures Europe, heading for a low of four years.
The Organization of the Petroleum Exporting Countries is being expected by many market watchers to maintain its target for collective output during its November 27 meeting, instead of cutting production to increase prices.
On Wednesday, JB Energy said in a note, “We see few factors in the short-term that could stem the decline in prices besides a massive and prolonged outage of Libyan crude, or OPEC intervention.”
OPEC said that its collective production for crude oil dropped 226,400 barrels per day in October to 30.25 million barrels per day, mainly due to lower production in Saudi Arabia.
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