Oil prices drop below $80 a barrel
DME Oman Crude Oil Futures Contract, the Asian pricing benchmark, traded at a new four-year low
Oman crude oil prices on the Dubai Mercantile Exchange fell below $80 per barrel on Tuesday for the first time in more than four years, as oil price dropped almost $2 per barrel continuing the trend of near five-month long slump.
The front-month December DME Oman futures traded 2,500,000 barrels at a low of $79.57 per barrel before settling at $79.93.
DME futures were last below the $80/b benchmark in October 2010. Prices have topped the $100/b benchmark since then peaking above $111/b in June but have now fallen by around $31/b in four months equalling 28%.
The new drop in prices has come weeks before OPEC's meeting in Vienna to discuss prices and production.
Many believe a move from the oil and petroleum exporting countries to curtail production is highly unlikely.
"I do not expect OPEC to make any production cut. A decision like this will be very difficult," Kuwait's oil minister Ali Al-Omair said Monday at a conference in Abu Dhabi, cited by the official KUNA news agency.
Oil prices plunged to more than four-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 - a move seen as an effort to maintain market share amid competition from US shale cheaper oil.
Christopher Fix, chief executive of DME, said: "The 2014 average for the DME is still just above the $100 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."