U.S. Oil Prices Drop Close to Six-year Low
Published By : 07 Aug 2015 | Published By : QYRESEARCH
The U.S. oil prices dropped on Thursday towards a six-year low amidst concerns that the global over-supply of crude oil will only increase while the summer season ends.
Oil prices have fallen from July and therefore the large quantities of crude production in the U.S. and other major suppliers have become worried about the Dollar and a lower consumption of oil by China.
The demand for oil and gas usually reduces towards the beginning of fall, when fewer drivers go out on vacations. At the same time, refineries purchase less crude oil for processing in order to conduct maintenance and repairs.
Ric Navy, the senior vice president at R.J. O’Brien & Associates, LLC, said that they are not witnessing any aspect of the industry that is showing signs of relaxing. Although the global demand for fuel is still very high, the supply has easily overtaken it.
Oil prices in March reached their six-year lows after the selloff that put oil prices down by almost 60% in the past nine months. Major causes for this to happen were an increase in the production of gasoline in the U.S. and consecutive decision made by the Organization of Petroleum Exporting Countries to keep their levels of output at higher levels than usual.
There was a drop of 49 cents in oil prices on Thursday, which constituted to 1.1% of the market price. The New York Mercantile Exchange priced oil at US$44.66 per barrel. This is the lowest recorded settlement after the 19th of March. Costs are lower than US$2 per barrel, more than the six-year slump of US$43.46 that was attained on March 17.