Oman crude oil prices on the Dubai Mercantile Exchange traded below US$80 per barrel Tuesday for the first time in more than four years, as the price dropped almost US$2 per barrel to continue the near five-month long losing streak.
The front-month December DME Oman futures traded at a low of US$79.57 per barrel before settling at US$79.93 per barrel at 12:30 Dubai time, with around 2,500,000 barrels traded during the pricing window.
Front-month DME futures were last below US$80 per barrel in October 2010, but since then the average yearly price has topped $100 per barrel. Prices this year peaked above US$111 per barrel in June but have now fallen by around US$31 per barrel in four months, or 28%. The average 2014 price of Oman crude to date is US$101.69 per barrel.
The latest losses came on increasing signals that OPEC will not act to curtail production when it meets in Vienna in late November. “I do not expect OPEC to make any production cut. A decision like this will be very difficult,” Kuwaiti Oil Minister, Ali Al Omair, said Monday at a conference in Abu Dhabi, cited by the official KUNA news agency.
Oil prices plunged to multi-year lows last week after Saudi Arabia, OPEC’s kingpin and the world’s top producer, cut its prices for crude sold to the US market. Analysts interpreted the move as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.
Christopher Fix, Chief Executive of DME, said, “The 2014 average for the DME is still just above the US$100 per barrel mark, and we are still seeing healthy demand for Oman crude. But in light of the current weak fundamentals, this month’s OPEC meeting will be critical.” DME is the premier international energy futures and commodities exchange in the Middle East. It aims to provide oil producers, traders and consumers engaged in the East of Suez markets with transparent pricing of crude oil.
Source : WAM News Agency for United Arab Emirates
