Crude-oil futures ended under $46 a barrel Tuesday, as oil supply estimates and comments from the United Arab Emirates’s oil minister about OPEC standing pat on oil production combined to stir oil-glut concerns. On the New York Mercantile Exchange, light, sweet crude for delivery in February fell 18 cents, or 0.4%, to $45.89 a barrel.That’s the lowest settlement for oil since April 20, 2009, and one that extends oil’s string of losses to a third straight session. Futures traded as low as $44.20 a barrel.
Adding to the oversupply worries, the U.S. Energy Information Administration said Tuesday it doesn’t expect the pace of U.S. oil production to let up. U.S. crude output averaged 9.2 million barrels a day in December, it said in a monthly report. U.S. oil production will average 9.3 million barrels a day in 2015 and 9.5 million barrels a day in 2016, the report indicated.
Oil prices lost nearly 5% on Monday alone, extending the selloff that has gripped oil markets since mid-2014. Sell-side analysts have slashed price forecasts and warned of a prolonged glut in global oil markets that will extend well into 2015. Read: Oil’s slump could upend $2 trillion in investments: Goldman
Economists and traders have been closely watching the Organization of the Petroleum Exporting Countries to see whether the cartel would budge on their decision to maintain oil production levels at 30 million barrels a year.
On Tuesday, Suhail Mohamed Faraj al-Mazrouei, the UAE’s oil minister, dashed such hopes, saying OPEC will stick to its decision to keep oil output unchangedregardless of current oil prices.