Global oil prices have taken another tumble as investor concerns about slow growth continue to persist.
Brent crude and US light crude oil both reported drops with the former hitting a near four-year of $87.74 (£54.86) a barrel while the latter fell $0.93 to $84.76, edging towards a two-year low. The continued has been put down to slow global growth as well as reports that oil producers are looking to maintain their current output level.
Reuters recently reported that Saudi Arabia indicated that it was capable of coping with lower prices and, coupled with weak economic growth, it could result in countries cutting their demand for oil. The change in oil price has had a knock-on effect in the stock markets at the start of trading on Monday (October 13th). The FTSE 100 was up 0.4 per cent to 6,366.24 while the Dow Jones opened at 16,556.75, a 13 point increase.
Experts are suggesting that oil prices could drop below $80 per barrels in the near future as the Organisation of Petroleum Exporting Countries (Opec) changes its tactics. The group is expected to keep its spigots open prompting increased competition between the world's biggest drillers to gain a better market share.
Speaking to the the Telegraph, Fatih Biroh, chief economist at the International Energy Agency (IEA), said: "Almost every drop of oil produced in the world is still going to be profitable at around $80."
Brent crude oil has been falling consistently over the past 27 months and it has been felt across the world. The Independent reported that the growing pessimism in oil sector did provide some positive with motorists enjoying a drop in petrol prices. Figures from the AA showed that the average cost of a litre of petrol dropped to 127.13p as of October 6th.
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