Oil prices fall to five-year low
Oil prices fell to a five-year low on Monday, December 1, on the back of the decision by OPEC countries not to reduce daily production, according to international news agency Reuters.
The price of oil futures of the benchmark North Sea Brent crude dropped by $1.88 to $68.27 a barrel, while the futures of the U.S. benchmark West Texas Intermediate (WTI) dropped by $1.73 to $64.42. Previously, both these standards fell to their lowest levels since 2009.
The price for both these standards has already fallen for five months, which has not happened since the financial crisis of 2008.
The experts believe that OPEC countries will be able to bear a price of $60 per barrel, but that it will cause a devastating blow on their competitors, such as producers of shale oil in the United States, and will delay investment in the future growth of production. OPEC plays a long-term game, and hopes that others are not able to do the same, experts said.
A slowdown in oil production in China also exerts pressure on the market, according to the official PMI index for November.
According to analysts, the new levels of support for North Sea Brent oil are $68 and $64 per barrel. If the WTI oil falls in price to $63.90 per barrel, the level of its support will be $50.