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Brent crude oil reported a 6.1% or $3.81 fall, to $58.79 a barrel by 10:50 am EST (1550 GMT), after earlier reaching its lowest mark since October 2017 at $58.57. US West Texas Intermediate crude (WTI) declined $3.75, or 6.8%, to trade at $50.88, and reached a low of $50.60, also the weakest since October 2017.
Brent crude oil this week slided 11.9% whereas WTI showed a 9.7% decline. This month so far, the oil prices have fallen more than 20%.
The major reasoning given behind the fallen is the oil supply led by US which is growing faster than demand. In order to prevent a build-up of unused fuel the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec 6.
Oil prices yesterday have fallen more than 6%, with Brent crude set for a 12% plunge this week, as fears that supply would overpower demand intensified, even as major producers considered cutting output.
The market is reported to be speculating a weaker demand for oil. China reported its lowest gasoline exports in more than a year. Asian Stockpiles of gasoline have surged, with inventories in Singapore rising to a three-month high meanwhile Japanese stockpiles also rose last week. Inventories in the United States are about 7% higher than a year ago.
On the other hand, according The International Energy Agency, the production of oil is well above demand. The non-OPEC output alone is expected to rise by 2.3 million barrels per day (bpd) this year. Oil demand next year, meanwhile, is expected to grow by 1.3 million bpd.
