MUSCAT: Oman’s crude oil price fell below $50 a barrel for the second time in a month as rising US oil inventories continue to cast doubts over OPEC’s ability to protect prices.
Oman crude oil futures traded at $49.50, 10 per cent below its April peak, after a report by the American Petroleum Institute showed inventories rose by nearly 900,000 barrels to 532.5 million barrels last week.
Data from Baker Hughes showed rig count rose by 13 to 870 by April 29, which represents an almost 100 per cent year on year rise in rig count. Slow demand in Asia and Europe has also contributed to the decline in prices. Brent crude futures fell to $50.46 per barrel while the West Texas Intermediate dropped to $47.50 per barrel.
Prices of crude oil have slumped since February even though OPEC members have shown unprecedented adherence to the deal made with independent producers in Vienna last year.
The OPEC agreement expires in June this year and members of the organization are meeting next month to decide if the agreement should be extended until the end of the year. Oman’s Minister of Oil and Gas Mohammed Al Rumhy has reportedly said that Oman will push for an extension of production cuts as it still remains the most viable solution.
Lifting production cuts, according to experts, may bring down prices to below $30 as more than 1.8 million barrels of oil may be pumped into the already glutted market every day, analysts warn.
