The price of oil continues to drop, despite reassurances from OPEC that the oil market may have finally found its bottom and should be on its way back up. Both Brent and WTI fell to a six-year low on Friday, January 23, 2015, at $50 USD/bbl and $48 USD/bbl, respectively. The spread between WTI and Brent futures is also getting smaller, decreasing by over 80% from $12 USD/bbl at the beginning of 2014 to $2 USD/bbl in January 2015. (Reuters)
In January 2015, data from NYMEX prompt-month future settlements showed that Brent and WTI oil prices traded near four-year lows—Brent and WTI traded at $43 USD/Bbl and $37 USD/Bbl below the last 12-month average. Furthermore, the last 12-month averages for Brent and WTI on NYMEX dropped to $96 USD/Bbl and $90 USD/Bbl, respectively. The Brent-WTI spread (represented by the purple area in the graph above) sat at $2 USD/Bbl this month, which was $4 USD/Bbl below the last 12-month average of $6 USD/Bbl.
Brent oil prices are already down 17% for the year, as global supply growth continues to outpace demand.OPEC decided not to lower its production quota in November, placing more pressure on non-OPEC producers, such as the United States and Canada, to reduce output.
Data Sources: CME, NYMEX