On the New York Mercantile Exchange (NYMEX), prompt-month contracts for Brent and Western Texas Intermediate (WTI) crude oil continued to dive for the sixth month in a row to the lowest levels of the past 12 months. By end of day December 17, 2014, the prices of Brent and WTI had both dropped by 16% and 17% respectively from the previous month. Throughout December 2014, prompt-month contracts for Brent dropped below $70 USD/Bbl to settle at $67 USD/Bbl on December 17, 2014. Meanwhile, the prompt-month contract prices for WTI plunged by $14 USD/Bbl to $63 USD/Bbl. Data from NYMEX future settlements showed that Brent and WTI oil prices traded near four-year lows—Brent and WTI traded at $34 USD/Bbl and $31 USD/Bbl below the last 12-month average. Furthermore, the last 12-month averages for Brent and WTI on NYMEX dropped to $101 USD/Bbl and $94 USD/Bbl, respectively. The Brent-WTI spread (represented by the purple area in the graph above) sat at $3 USD/Bbl this month, which was $4 USD/Bbl below the last 12-month average of $7 USD/Bbl.
Global crude benchmarks roughly followed the same story of the past few months: ample supply and lower demand. This month, worries over weakening global demand combined with signals that OPEC producers will not reduce output weighed on prices in the final days of the month. Saudi Oil Minister Ali Al-Naimi commented on OPEC’s reluctance to curb output without the support of other producers and attempts so far at cooperation have failed. It is safe to say that crude has entered a bear market amid the record high US output and signs of slow demand. According to the EIA, US crude stockpiles decreased 0.8 million barrels to 379.9 million in the third week of December.
 “Naimi: OPEC Needs More Support for Output Cutdown.” CNBC. December 18, 2014. Accessed December 18, 2014. http://www.cnbc.com/id/102280630#.
 “Weekly Petroleum Status Report Highlights.” Energy Information Administration. December 17, 2014. Accessed December 18, 2014. http://www.eia.gov/petroleum/supply/weekly/pdf/highlights.pdf.
Data Sources: CME, NYMEX