Oil prices slide below $50
Crude oil prices went down in early trading yesterday amid expectations of a status quo policy from Organisation of Petroleum Exporting Countries (OPEC) and prospects of a global economy stuck in low gear.
Crude oil prices recoiled early yesterday, falling further away from the psychological threshold of $50 per barrel.
Specifically, the price for Brent crude oil was off 1.7 by per cent to start the day at $49.05 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down by 1.6 percent to $48.32 per barrel.
Members of the OPEC are meeting today for the first time since a proposal to freeze production at January levels collapsed, after Iran said it would only consider its output once it regained a market position lost to economic sanctions.
De facto OPEC leader Saudi Arabia may be looking to market forces to sway the price of crude oil and the supply levels contributed from major producers.
Lower crude oil prices have sidelined some production from the United States, though total OPEC production for April, the last full month for which data are available, is about a half percent higher than the average during the first quarter of the year.
Oil prices have held steady in the upper $40 range for several sessions as low production balances against higher demand for energy products from major economies.
The Secretary-General for the Organisation Economic Cooperation and Development (OECD), Angel Gurria, said yesterday from Paris the global economy is stalled.
“We see the world economy stuck in a low-growth trap,” he said. “Global growth is projected to continue to limp along at around three per cent this year, and to pick up only modestly in 2017.”
Lower crude oil prices had strained output in North America, though Canadian energy company Husky Energy said Wednesday that, after retooling its portfolio, it would see momentum if oil stayed above $30 per barrel.