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WTI oil falls to $39 amid global supply glut

Published 12/07/2015, 04:50 AM
© Reuters.  OPEC decision continues to weigh on oil
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Investing.com - Oil futures fell again on Monday, with West Texas Intermediate prices approaching the $39-level after OPEC left its production levels unchanged despite a global supply glut.

Crude oil for delivery in January on the New York Mercantile Exchange slumped 51 cents, or 1.26%, to trade at $39.47 a barrel during European morning hours. It earlier fell to $39.20, a level not seen since August 27. On Friday, Nymex futures tumbled $1.11, or 2.7%.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for January delivery declined 32 cents, or 0.74%, to trade at $42.68 a barrel. London-traded Brent lost 84 cents, or 1.92%, on Friday.

The Organization of the Petroleum Exporting Countries failed to agree on output targets to reduce an oil glut that has cut prices by more than 60% since June 2014. As a result, crude prices are expected to remain stubbornly low amid a glut of oversupply on global energy markets.

The 12-member group produced approximately 31.5 million barrels per day last month. Global crude production is outpacing demand following a boom in U.S. shale oil and as OPEC opted not to cut production in order to defend market share.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.21 a barrel, compared to $3.03 by close of trade on Friday.

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