Global Oil Prices Continues to Hover at a Five-year Low

TEMPO.CO, Jakarta - Global crude prices continue to fluctuate at a five-year low on Wednesday morning, December 17, 2014, as major oil producers refuses to put a cap on its' aggregate oil production in response to the continuously falling prices.

January contracts for the light sweet crude oil went slightly up by two cents to trade at US$55.93 per barrel at the New York Mercantile Exchange, while January contracts for the Brent oil went down by US$1.2 to trade at US$59.86 per barrel, according to a report by Xinhua.

The United Arab Emirates (UAE) Minister for Energy, Suhail Al-Mazrouei, said that the Organisation of Petroleum Exporting Countries (OPEC) will not put a cap on production - even if prices fall to as low as US$40 per barrel.

Previously on November 27, OPEC decided to maintain its' aggregate daily output at 30 million barrels per day. Analyst are saying that OPEC's decision is bearish given the current state of prices - especially since it is known that OPEC members produce one-third of the world's crude oil output.

Overabundant reserves, declining demand, a stronger US Dollar, as well as uncertainties surrounding the global economic outlook, are among the factors which affects global oil prices. Furthermore, commodities brokers are waiting for the release of the weekly US oil reserves figures that are slated to be released on Wednesday - which is predicted to indicate a downturn in supply.

Another factor that plays a role in the continuous decline of oil price is the US shale oil boom of recent years. According to figures posted by the US Energy Information Administration (EIA), US oil production output as per December 5 has increased to 9,12 million barrels per day - a historical high since weekly records began in January 1983.

ANTARANEWS