Crude oil futures continued declining on Thursday amid renewed signs of glut in global oil supply leading to weak projections for demand.
November delivery light sweet crude futures on the New York Mercantile Exchange traded at $80.14 per barrel, down 2% or $1.64. Ahead of the opening of regular trade, it hit below $80.
According to Market Watch, November Brent crude dropped 1.3% or $1.09 to $82.69 per barrel on the London ICE Futures exchange.
Nymex WTI crude was under additional pressure after the American Petroleum Institute said on Wednesday that its data indicated an increase of 10.2 million barrels weekly in the US crude stockpiles.
Analysts expect the US Energy Information Administration survey to indicate a buildup of inventory or around 2.2 million barrels last week.
Repsol S.A. chief economist, Pedro Antonio said, “What you have is an oversupply because since 2012 non-OPEC production has surpassed demand.
Gulf nations fear that lowering the limit on the amount that should be produced by the OPEC would cause members of the cartel to lose share in oil markets globally.
Fox Business quoted Energy Management Institute analyst, Dominick Chirichella as having said in a note, “Most oil-market participants remain primarily focused on, will OPEC cut production or wait it out until prices drop to a level where non-OPEC producers cut production?”
He added, “The overwhelming market view is oil-demand growth will continue to be lackluster for the next year or so.”
Several OPEC countries, including Kuwait and Saudi Arabia have cut off November selling prices indicating a willingness to maintain market share in the prevailing low-price environment.
A Gulf official said that the oil prices for US might fall to about $70 per barrel before the substantial quantities for the US shale oil production become uneconomical, implying that there are officials in OPEC who expect further declines in prices.