The prices of crude for delivery over the next two years are falling as the price of oil continues to slide, with January 2015’s average forward prices for both Brent and WTI around $10 to $15 USD/bbl cheaper than forward prices in December 2014. The price of WTI for delivery in February 2015 dropped from $59 USD/bbl to $48 USD/bbl this month, while the price of Brent dropped from $63 USD/bbl to $50 USD/bbl.
Oil has declined rapidly since mid-June, as persistent output growth from the United States, along with sustained OPEC production, have overlapped with a decrease in global demand. Despite plunging oil prices, OPEC defended its November decision to maintain its official crude petroleum ceiling of 30 million barrels per day rather than cut production to cushion prices. By keeping the production at the current level, there won’t be enough push to bring down the prices when considering global demand.
Data Sources: CME, NYMEX