Global Oil Price Drops

TEMPO.CO, Jakarta - Global crude oil prices plunged deeper on Wednesday, 22 October, 2014, (Thursday morning, Jakarta time), with prices in New York dropping by almost US$2 per barrel - down to its' lowest point in 16 months.

The price for December deliveries of the Brent North Sea crude oil also dropped by US$1,51 to close at US$84,71 per barrel, according to an AFP report.

The price December deliveries of the US benchmark - the light sweet crude oil, also known as the West Texas Intermediate (WTI) - went down by US$1,97 to close at US$80,52 per barrel at the end of trading session in New York - its' lowest level since June 2012.

"Prices continue to fall as the US Dollar gains more traction, and following reports of an abundant reserve - much higher than what had previously been anticipated," said analyst Jasper Lawler. "The WTI is possibly heading towards the US$80 mark."

The United States' (US) Department of Energy reported on Wednesday that US oil reserves went up by 7,1 million barrel in the week ending on October 17 - more than twice than what the market had expected.

"Although the oversupply is comparatively smaller than last week's position at 8,9 million barrels, the figure is still much higher than previously expected," said Fawas Razaqzada, an analyst for Forex.com.

Reserves of distillates in the US (which includes heating oil) went up by 1 million barrel - analyst had predicted a drop in supply by 1,5 million barrels. Meanwhile, fuel reserves declined by 1,3 million barrels, in line with market expectations and expert predictions.

Crude oil futures had gone up at the beginning of transaction on Wednesday morning as China recently posted a positive industrial production figures. However, reports of an oversupply and worries over the state of demand in main markets have reversed the gains in the following trading session.

ANTARANEWS