Oil prices are bluntly falling on a global front and chances are high that they may fall further down. In a recent event, oil prices of West Texas intermediate reduced to less than $65 per oil barrel, the least since July 2009. Speculations are ripe that the prices would further drop before OPEC’s decision of maintaining the current volume of oil output and leaving the decision of increasing or decreasing oil output upon the market demands.
Liquid government bonds benchmark futures slashed further by 3 percent in London and New York after the OPEC (Organization of Petroleum Exporting Countries) stated that it will leave the decision of reducing oil output to market conditions. With the 3 percent loss in shares, the futures crossed their weakest mark in the past six years.
Iran’s Oil Minister Bijan Namdar Zanganeh stated in an interview that the current oil prices give no guarantee of a decline in the output of shale gas from the U.S. U.S. is currently pumping crude oil at the fastest rate in the past three decades, leading to collapsed oil prices in the global market.
OPEC has resisted a call from the members of the committee including Iran, Iraq and Venezuela of reducing its production targets from 30 million barrels per day at a Vienna meeting. It looks clear that a war of production is on and the fittest will be the one to survive the competition. The market will see a test of the $60 per barrel soon. Oil prices that had already decreased by 18 percent this November are down by 34 percent this year.