OPEC Bets Drag Down Oil Prices

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Crude oil futures plunged in the domestic market on Monday as investors and speculators exited positions in the energy commodity, tracking a weak trend in the overseas market amid speculation that the Organisation of the Petroleum Exporting Countries (OPEC), which accounts for about 40 per cent of global supplies may not slash output in the near-term despite a four-month decline in prices.

Instead, big OPEC producers such as Saudi Arabia are slashing prices in a bid to gain market share amid surging US oil production. Kuwait's oil minister warned that the group is unlikely to cut production at its upcoming OPEC meet in Vienna on November 27.

OPEC Bets Drag Down Oil Prices
Meanwhile, Libya, the holder of Africa's largest oil reserves said that it is planning to resuming production at two oil fields in the coming days, raising fears of excess global oil supplies.

China 'exports grew at a weaker pace last month, signaling a deepening slowdown in the world's second biggest economy, darkening the demand outlook for the fuel. Overseas shipments rose 11.6 per cent, year on year in October 2014, compared to an annual 15.3 per cent in September 2014.

Crude futures may continue the downward journey amid bets that US crude supplies rose for a sixth week.

At the MCX, Crude Oil futures, for the November 2014 contract, closed at Rs 4,783 per barrel, down by 1.6 per cent, after opening at Rs 4,864, against a previous close of Rs 4,861. It touched an intra-day low of Rs 4,765.

Read more about: crude oil
Story first published: Tuesday, November 11, 2014, 12:40 [IST]
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