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oil prices 2017

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Oil prices have dropped further, adding to near 5% losses seen on May 4, as concerns about a worldwide supply glut resurfaced.

Brent crude fell 1.8% at $47.49 a barrel, while US crude dropped 2.1% to $44.58 a barrel.

Oil is at its lowest level since November 2016, when OPEC struck a deal to cut output.

Investors are worried that OPEC nations will fail to rein in output further at their next meeting later this month.

Oil prices down by about 15% since the start of the year, despite Opec’s agreement in November which cut output by 1.8 million barrels a day.

Photo Getty Images

Supply is still outpacing demand, with US oil production alone up by 10% since summer 2016.

It now pumps out some 9.3 million barrels a day – not far short of the two giant oil producing nations of Russia and Saudi Arabia.

OPEC and other oil nations are meeting on May 25 where they will discuss the success of the six-month cutback and whether it should be deepened.

Russia, one of the non-OPEC countries to sign up to the cuts, gave mixed signals on May 4 about whether it would continue.

Data released on May 2 indicated US crude stocks fell 930,000 barrels last week. Analysts had been expecting a drop of 2.3 million barrels.

The fall in crude prices hit global energy and commodity stocks.

On May 4, US oil giants Chevron and Exxon Mobil were two of the biggest fallers on Wall Street, dropping 2% and 1.3% respectively.

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Oil prices have fallen after the OPEC said global crude stocks had risen.

A surprise output jump from Saudi Arabia, OPEC’s biggest member, put further pressure on prices.

Gains made since OPEC announced output cuts in 2016 have nearly all been erased.

Saudi Arabia said it was “committed” to stabilizing the global oil market, and that its output was still in line with its OPEC target.

OPEC said in its report: “Despite the supply adjustment, stocks have continued to rise, not just in the US, but also in Europe.

“Nevertheless, prices have undoubtedly been provided a floor by the production accords.”

Photo Getty Images

In February, Saudi Arabia’s production increased to 10.011 million barrels per day, compared with 9.748 million barrels per day in January.

Saudi Arabia’s energy ministry said the country “is committed and determined to stabilize the global oil market by working closely with all other participating OPEC and non-OPEC producers”.

Oil prices fell after the release of the OPEC report to trade close to $50 a barrel, their lowest since November.

Crude prices are still higher than $40 per barrel a year ago and a 12-year low of about $28 in January 2016.

Brent crude oil price settled about 0.5% down at $51.09 per barrel, while US crude was at $47.90.

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