Prices of crude oil have fallen to their lowest in the past many months as oversupply continues to cause troubles to the global oil market. Adding more turbulence to the already futile condition of the global oil market, the new multi-month low has led market to an even worse state.
Resilient output from the U.S., coupled with consistently high production from other key suppliers of crude and the concerns regarding a turbulent Chinese economy are adding to worries of investors in the past few weeks. The U.S. Energy Information Administration had said Wednesday that crude oil production has risen in the last week, leading to price losses.
The concerns of oversupply have continued to burden the prices on a global level, analysts say.
Delivery of light, sweet crude oil for the month of September has recently fallen by 68 cents, or nearly 1.5% to a renewed low price of US$44.47 per barrel on the Mercantile Exchange of New York. The global benchmark of crude oils, Brent, also fell by 26 cents or 0.5% and held the price 49.33 on the ICE futures of Europe.
The latest weekly data gathered by EIA show that U.S. crude oil inventories have fallen, a factor that usually boosts prices due to strong demand. However, the effect could not bring any betterment to the market as it was overshadowed by a rising stockpile of gasoline and other finished products.
Meanwhile, the production of U.S. oil increased by 52,000 barrels a day, making the count 9.5 million barrels per day now.
Producers of shale oil are lowering prices of their products in a swifter manner than expected, proving their superior competiveness in the global oil industry. It is being estimated that the global crude market is currently oversupplied by nearly 2 million barrels per day, which is higher than 1.8 million barrels per day as compared to the first half of the year.