Oil Prices Take Another Dive on OPEC Report, US Supplies - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Oil Prices Take Another Dive on OPEC Report, US Supplies

Posted:
NEW YORK (AP) - The price of oil took another dive Wednesday, plunging to five-year lows amid mounting evidence that global supplies are far outstripping demand.

The U.S. Energy Department reported a surprise increase in domestic oil inventories and OPEC projected that next year, demand for its crude would sink to levels not seen in more than a decade.

Benchmark U.S. crude slumped 5 percent, or $3.07, to $60.75 a barrel on Wednesday. Prices have not been that low since July of 2009. U.S crude prices have fallen 17 percent in two weeks and are now 43 percent below the $107.26 that a barrel fetched at its peak this year.

Brent crude, an international benchmark used to price oil used in many U.S. refineries, fell $2.91 to $63.93 in London.

Energy analyst and trader Stephen Schork said in an interview that he expects that the combination of weak economic news out of Asia and growing global supplies will push oil down further, to below $60, by the end of the week. "It's the proverbial 'trying to catch a falling dagger' and I'm not going to try to catch it," he said.

OPEC said Wednesday that it expects demand for its crude to fall to 28.9 million barrels per day next year, 400,000 barrels per day less than in 2014. The cartel's official production target is 30 million barrels a day, which would mean far more oil on the world market than is being consumed.

Also on Wednesday, the Energy Department reported a surprise increase in U.S. crude supplies of 1.5 million barrels last week. Analysts were expecting a decline of 2.2 million barrels. Gasoline stocks also increased more than expected.

Falling oil prices are making for sharply lower gasoline, diesel, jet fuel and heating oil prices and giving consumers, shippers and airlines a lift.

Economists say lower gasoline prices act like a tax cut, leaving more money in consumers' pockets to spend on other things. The national average price of gasoline fell again Wednesday to $2.64, saving drivers $1.05 per gallon compared to what they were paying in late June.

The Energy Department projected in a report Tuesday that gasoline will average $2.60 next year, 23 percent below this year's projected average. If that comes to pass, it will save a typical household $550 next year.

Lower oil prices are taking their toll on oil producers, though, sending company shares plummeting and forcing companies to cut spending. BP said Wednesday it would aim to cut costs by $1 billion next year, a move that would likely involve significant job cuts. 
  • Most Popular StoriesMost Popular StoriesMore>>

  • Police Identify Driver in Crash that Shut Down Rehoboth Avenue

    Rehoboth Police Identify Driver in Crash that Shut Down Avenue

    Jul 14, 2018 10:44 PM2018-07-15 02:44:00 GMT
    Saturday, July 14 2018 10:45 PM EDT2018-07-15 02:45:28 GMT
    REHOBOTH BEACH, Del.- Rehoboth Beach Police have identified the Middletown man accused of hitting multiple vehicles and injuring five people last weekend. Police say 45-year-old Martin Tuohy of Middletown was attempting to back out of a parking spot whenMore
    REHOBOTH BEACH, Del.- Rehoboth Beach Police have identified the Middletown man accused of hitting multiple vehicles and injuring five people last weekend. Police say 45-year-old Martin Tuohy of Middletown was attempting to back out of a parking spot when More
  • UPDATE: Police Investigating Deadly Motorcycle Crash in Laurel

    Police Investigating Motorcycle Crash in Laurel

    Jul 14, 2018 4:53 PM2018-07-14 20:53:00 GMT
    Sunday, July 15 2018 3:49 PM EDT2018-07-15 19:49:37 GMT
    LAUREL, Del.- The Delaware State Police is advising people to avoid parts of Laurel due to a motorcycle crash. Troopers say the crash took place on Ralphs Road between Waycross Road and Skeeter Bit Lane west of Laurel. Officers classify the crash as serioMore
    LAUREL, Del.- The Delaware State Police is advising people to avoid parts of Laurel due to a motorcycle crash. Troopers say the crash took place on Ralphs Road between Waycross Road and Skeeter Bit Lane west of Laurel. Officers classify the crash as serioMore
  • Woman Arrested for Stealing and Burning Flag Placed for Fallen Delaware State Trooper

    Woman Arrested for Stealing and Burning Flag Placed for Fallen Delaware State Trooper

    Jul 14, 2018 3:31 PM2018-07-14 19:31:00 GMT
    Saturday, July 14 2018 3:36 PM EDT2018-07-14 19:36:52 GMT
    LEWES, Del.- A Wilmington woman is facing charges after destroying a flag on the Nassau Bridge placed in honor of late Delaware State Police Trooper William F. Matt. Tim Dale and Dave Repass placed a "Thin Blue Line" flag on the Nassau Bridge to pay tribuMore
    LEWES, Del.- A Wilmington woman is facing charges after destroying a flag on the Nassau Bridge placed in honor of late Delaware State Police Trooper William F. Matt. Tim Dale and Dave Repass placed a "Thin Blue Line" flag on the Nassau Bridge to pay tribuMore
Powered by Frankly

All content © Copyright 2000 - 2018 WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices