On Wednesday, the oil prices crashed below $27 US Dollars a barrel. This is the first time the prices are too low, since 2003. This is a major setback and slump for the various financial markets of world. The price of oil is fallen till 25 percent in 2016. According to the fresh data of American Petroleum Institute, in last week the stocks of U.S. crude rose from more than their expectations.
Oil Prices Crash
After the ban is lifted from Iran for the business of oil, a shipping firm of Middle East has resume direct business with Iran. It is a reminder that oil may flow, around the world quickly. Now the companies of Iran have plan to compete other companies of Europe in stock market shares. This statement has come from the side of John Kilduff, who is a partner of Again Capital LLC in New York. Saudi Arabia & Russia are already competing U.S oil in Europe markets. As per him, ‘it is a battle royale’.
The worst settlement of U.S. oil was recorded in May 2003 and since then it is the worst record. Many traders have fears that this glut of crude supply could last longer. The slide is reached till 25 percent that is a real pain on the oil drillers. The producing nations of oil are continuously pumping more oil to supply it in overseas market.
Since year 2013, the world equities are at their lowest level. The index fell till 9.9 percent in January. This is the biggest drop of index since 2009.
‘The international Energy Agency’, advised the countries where industry is the major source of economy that in 2016 the world could ‘drown in oversupply’. The exports of Iran are now excess of oil in the whole world.
Due to these reasons, it is possible that in coming months the price of oil will go lower & lower. It will definitely effect the production of various countries that are in oil business.
As per the largest oil producer of Russia in private sector, they are expecting further drop in the price. This is the first time in many years, they are facing a lot of competition in International market. The chief executive of Lukoil has also warned that oil industry is at the line of survival and they are still cutting and drilling.
The oil-sands producers of Canada are losing their money on every barrel, as per their official statement. It is a real point of worry for most of the developed countries in the world. Last week, the stocks of U.S. commercial crude oil have risen till 3 million barrels. American Petroleum Institute, which is another U.S. industry group will release its report on next Wednesday.
The energy information Administration of U.S. government will release its official data on Thursday. It is late due to the public holiday in the state.