Déjà vu… US crude is under $30 again as industry leaders predict the supply glut will continue
The US oil benchmark, West Texas Intermediate (WTI), has once again dipped under the $30 per barrel mark, having hovered over the psychological barrier for a week.
Brent crude was trading around $33.29 when WTI fell under $30.
The latest drop comes as world’s largest independent oil-trading house warns the oil prices could stay low for as long as 10 years due to a combination of slowing Chinese economic growth and continued output from US shale.
Vitol Group BV chief executive Ian Taylor said in an interview with Bloomberg: "It’s hard to see a dramatic price increase."
Taylor reckons prices are likely average $50 a barrel for the next decade, though he said he was unsure whether prices have already hit their lows.
He predicts that prices were likely to come up slightly in the second half of the year, settling between $45 to $50 a barrel, as supply continues to add to higher global stockpiles.
The fall comes as European and US stocks tank following weaker than expected economic numbers from China last night.
Read more: Brent crude and WTI: Low oil prices aren’t a death knell for the global economy
Over the past few weeks Russia has pushed for a meeting with Saudi Arabia led Opec to agree an oil price production limit.
The attempts at a meeting were shot down by the cartel.
Russian minister Alexander Novak went as far as to suggest a deal to cut global production by five per cent was on the table, sending prices up by almost 10 per cent at the time.
According to analysts, the US would have to be involved in any deal to put a ceiling on global production after the country surpassed Saudi as the worlds biggest producer of oil.