TEMPO.CO, Jakarta - World oil prices dropped for almost 4 percent on Tuesday, or Wednesday morning 30 November, 2016, in the midst of a planned oil production limit.
In the United States benchmark crude, the Light Sweet crude oil or West Texas Intermediate (WTI) went down US$ 1.85 which made it stay at US$ 45.23 per barrel in the New York Mercantile Exchange.
Meanwhile in the global benchmark, Brent North Sea crude oil went down to US$ 1.86 for the shipment in January, which closed at US$ 46.38 per barrel in the London ICE Futures Exchange.
A number of media reports said that Iran and Iraq refused to cut down crude oil production, which makes it difficult for Organization of Petroleum Exporting Countries (OPEC) to reach a deal in limiting the global production, on Wednesday.
OPEC, which contributes to one-third of the global oil production, had agreed on September to limit oil production at the level of 32.5 million – 33.0 million barrels per day, compared to the current oil production of 33.64 barrels per day.
According to Iran, they intend to increase production in order to regain their market share, which they lost under Western sanctions. Especially since Saudi Arabia increased their production while Iran was under sanctions.
A number of analysts which includes Morgan Stanley and Macquarie says that oil prices will drop even further if OPEC fails to reach a decision, it can potentially reach a number as low as US$ 35 per barrel.
ANTARA