World Oil Prices Hit Bottom Low on Oversupply

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  • TEMPO.CO, Jakarta – Global crude oil prices fell over to concerns that the Organization of Petroleum Exporting Countries (OPEC) will not cut production. At this month's meeting, OPEC discussed a possibility that it would not cut production to raise prices and curb the excessive supply.

    The US futures benchmark West Texas Intermediate (WTI) price for December delivery closed at US$77.18 per barrel, down US$76 cents from the previous day's price, the lowest in three years.

    Gene McGillian of Tradition Energy yesterday said that for the last three months oil prices have gone from multiyear lows to multiyear lows. "Things will get difficult until we get to the OPEC meeting," McGillian said, as Channel News Asia quipped from AFP.

    In its monthly report released yesterday, OPEC said that the price of crude oil in October stood at an average US$ 85.06 per barrel, down 11.3 percent from September's price. OPEC noted this is the lowest price in four year that resulted from "concerns about the pace of global economic growth."

    On Wednesday, Saudi Arabia's Energy Minister Ali al-Naimi rejected claims that his country is leading a price war in the oil market after crude oil prices continue to decline. Speaking at a conference in Acapulco, Mexico, Naimi said Saudi does not seek to politicize oil, nor does it colludes against anybody. "For us, it is a question of supply and demand. It is purely business."

    Last week Saudi was touted to have caused global oil prices to tumble after the oil kingpin decided to cut its crude price to US market whilst raising prices for the Asian market. Analysts assumed that the Saudis aim to strengthen its market share in the US amid a surge in the world's oil supply.

    CHANNEL NEWS ASIA | SETIAWAN ADIWIJAYA