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Oil prices slump further amid oversupply, weak demand

 
 
 
 
 
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Oil prices have plunged more than 50 percent since June last year.

Oil prices have slumped even further to reach six-year lows, amid oversupplies by certain countries and a sluggish global economy.

The US benchmark West Texas Intermediate (WTI) for February delivery saw an 18-cent drop on Tuesday, selling at USD 45.89 per barrel on the New York Mercantile Exchange.

It was the WTI’s lowest close since March 11, 2009, when it was sold at USD 42.33.

European benchmark Brent crude oil for February delivery finished at USD 46.59 a barrel in London, down 84 cents from Monday, when it had closed below USD 50 for the first time since April 2009.

Earlier, the United Arab Emirates’ Oil Minister Suhail bin Mohammed al-Mazroui said the Organization of the Petroleum Exporting Countries (OPEC) would not be changing its production strategy, and there is no intention to meet again until June.

Kuwait’s Oil Minister Ali al-Omair also echoes the remarks on Tuesday when he said, “We expect this situation to continue until the surplus on the market is absorbed and the world economy improves. Forecasts indicate that this will not happen before the second half of 2015.”

Oil prices have plunged more than 50 percent since June last year over increased supplies by certain countries such as Saudi Arabia, the largest producer in OPEC, and lackluster global economic growth.

OPEC, which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market mainly due to opposition from Saudi Arabia. The cartel produces 30 million barrels per day.

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