US Crude Oil Falls Under $28/bbl, Lowest Since 2003

US oil falls to its lowest since September 2003 below $28 a barrel on worries over a global supply glut.

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Business
1 min read
Crude inventories in the United States, the world’s largest petroleum producer, rose 2.6 million barrels last week. (Photo: AP)

Crude futures slumped again in early Asian trade on Wednesday, with US oil falling to its lowest since September 2003 below $28 a barrel on worries over a global supply glut.

That came as the International Energy Agency, which advises industrialized countries on energy policy, warned on Tuesday that oil markets could “drown in oversupply”.

U.S. crude futures were trading down 46 cents at $28.00 a barrel, after dropping to $27.92 earlier in the session – a new low since September 2003.

Brent futures dropped 19 cents to $28.57 a barrel after settling up 21 cents, or 0.7 per cent, in the previous session. They were hovering close to a 12-year low.

Oil prices are at a level where OPEC countries are all struggling. They are selling oil for cash flow not for profit. US producers are holding out, but I think they’re bleeding as well. Looking at current prices, oil producers will engineer something to push prices higher.

Jonathan Barratt, Chief Investment Financial Officer, Ayers Alliance

US commercial crude oil and gasoline stocks were forecast to have risen by 3 million to 485.6 million barrels last week, a preliminary Reuters survey taken ahead of weekly inventory data, showed on Tuesday.

Ample storage space for crude around the world, including 230 million barrels of new storage to be completed this year, will help prevent further sharp price falls but will weigh against significant price rises, according to analysts and industry watchers.

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