Oil price dropped dramatically on Wednesday
The price of both American light crude and North Sea oil dropped on Wednesday evening (CST). The dramatic development in the oil price is explained by fear for the global economy caused by US President Donald J. Trump’s trade crusade against China and others.
At 5 pm CST the price of a barrel of Brent crude was USD 77.20. At 10 pm the price was down to USD 73.90. Over the course of the day, the price therefore dropped by 4.85 per cent in a matter of hours.
4 dollars a barrel disappeared in a single day
Rock bottom was hit at 10:22 pm with a price drop of nearly 4 dollars to USD 73.22 for the day.
Also, the price of American light crude has dropped a lot, down 3.52 per cent in the course of Wednesday. Around 5 pm a barrel of US light crude was traded at around the USD 73 mark, against USD 70.52 dollars at just after 10 pm.
The drop, which is the largest in nearly three years, is partly due to fear that the effects of the trade war between the US and China will lead to lower global growth and lower oil demand according to Marketwatch, published by Hegnar.no.
Increased production, lower stores
The online newspaper mentions a stronger US dollar, increased production in Saudi Arabia, that exports from Libya are on its way back in the market and speculation about exceptions to the blockade of Iran’s oil exports as other contributing factors,. According to the newspaper, it is also speculated whether US President Donald J. Trump will attempt to influence Russia to increase its oil production when he meets with his Russian counterpart, Vladimir Putin, in Helsinki next week.
On Wednesday afternoon it was revealed that US stores of crude oil decreased by 12.6 million barrels to 405.2 million barrels last week. It was expected that the stores would decrease by 4.5 million barrels, but the oil price started dropping before these figures became available, according to Dagens Næringsliv (DN).
© NTB scanpix / #Norway Today
