Oman crude oil prices on the Dubai Mercantile Exchange traded below $80/barrel Tuesday for the first time in more than four years, as oil price dropped almost $2/b to continue the near five-month long losing streak.
The front-month December DME Oman futures traded at a low of $79.57/b before settling at $79.93/b at 12:30 Dubai time, with around 2,500,000 barrels traded during the pricing window.
Front-month DME futures were last below $80/b in October 2010, but since then the average yearly price has topped $100/b. Prices this year peaked above $111/b in June but have now fallen by around $31/b in four months, or 28%. The average 2014 price of Oman crude to date is $101.69/b.
The latest losses came on increasing signals that OPEC will not act to curtail production when it meets in Vienna in late November. "I do not expect OPEC to make any production cut. A decision like this will be very difficult," Kuwaiti oil minister Ali Al-Omair said Monday at a conference in Abu Dhabi, cited by the official KUNA news agency.
Oil prices plunged to multi-year lows last week after Saudi Arabia, OPEC´s kingpin and the world´s top producer, cut its prices for crude sold to the US market. Analysts interpreted the move as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.
Christopher Fix, Chief Executive of DME, said: "The 2014 average for the DME is still just above the $100 barrel mark, and we are still seeing healthy demand for Oman crude. But in light of the current weak fundamentals, this month’s OPEC meeting will be critical."