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Oil dips below $45 on Opec’s no-cut signal

Oil dips below $45 on Opec’s no-cut signal
The comments from the energy minister for the United Arab Emirates, a member of OPEC, put more downward pressure on crude on Wednesday. The comments reaffirmed the position of OPEC’s Arab Gulf members that lowering production would only erode their market share and benefit rivals, such as shale drillers in the US. Last November OPEC decided to keep production levels steady. That decision came despite calls from some from within the 12-member bloc to curb output in an effort to boost prices.

The price of US benchmark crude traded as low at $44.20 a barrel early, the lowest since April 2009. The price has dropped since last June, when it reached $107.

In late morning trading on the New York Mercantile Exchange, US crude was down 34 cents, or 0.8 per cent, to $45.72. Brent crude, the international benchmark, fell $1.41, or 2.9 per cent, to $47.28 a barrel in London.

Oil prices have continued to fall in the new year. Already US crude is down 15 per cent for 2015, and Brent is off 18 per cent. Analysts at Ritterbusch and Associates are forecasting that US crude will go as low as $40.25 a barrel. The analysts wrote in a note to investors today that they see ‘little support’ for oil this week, partly because they expected a report Thursday to show larger-than-normal increases in oil supplies.

Meanwhile the word ‘inflation’ has become the lowest searched topic on search engine Google due to the softening of prices across segments, including global crude rates. “Inflation, which saw a tremendous search interest during the past few years, not only saw a decline in search interest this year but was also the lowest in terms of online search interest,” Google said in its latest search trends analysis.

 Searches around ‘inflation’ had peaked around mid-August to end of October in 2013 but trends in the same period of 2014 reflected a lowering of interest on the word linked searches, the global search engine said.
PTI

PTI

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