Oil Price Falls Below $27 Per Barrel For First Time Since 2003

For the first time since 2003, the price of Brent crude oil sold below $28 a barrel on Wednesday, January 20.

America’s crude grade – West Texas Intermediate (WTI) sold at  $26.62 and OPEC basket grade $23.85 a barrel on Tuesday, January 19.

Despite over 25 per cent slump in oil price so far this year with the attendant pains and fears, oil drillers and producing nations have continued to pump more oil into an oversupplied market.

Oil traders are concerned that the crude oil supply glut could last longer.

The world stock markets are declining. Nigerian stock market last week lost over N455 billion as stock prices failed to rally.

The International Energy Agency (IEA) said in a report that the world may soon drown in oversupply. Senior market analyst at Price Futures Group, Phil Flynn said there is also “a record short position in hedge funds and we have the promise of more Iranian oil on the world market. Add it all up and it’s causing the crude-oil market to crater around the globe.”

Iran’s production is expected to ramp up fairly significantly this year.

The country projects that its production will increase by 500,000 barrels per day (bpd ) in the coming weeks, along with a further 500,000 bpd in the next few months.