Sign in Subscribe
Petroleum

Crude Oil Prices Plummet to 9-Year Low Following OPEC Meeting

Strategic Insights

— 1 min read

Crude oil prices plummeted to a nine-year low after the OPEC meeting, leading to a technical free fall in the petroleum complex. The April Nymex light, sweet crude futures hit an intraday low of $13.26/bbl, with a loss of 78 cents to settle at $13.28/bbl. This marks the lowest price since November 22, 1988. The price depression is attributed to OPEC overproduction, and the price correction is the result of an OPEC meeting that ended with an agreement to abide by quotas.

Key Takeaways:

  • The April Nymex light, sweet crude futures hit an intraday low of $13.26/bbl, the lowest price since November 22, 1988.
  • The price depression is attributed to OPEC overproduction, and the price correction is the result of an OPEC meeting that ended with an agreement to abide by quotas.
  • May Nymex crude also took a substantial loss, falling 78 cents to close at $13.65/bbl.
  • The Commitment of Traders Report from the Commodity Futures Trading Commission shows that financial funds retained their very scant short exposure in crude futures contracts.
  • The chances of a technical short-covering rally are minimized, leaving wide open the chance that funds reclaim their extreme short positions reached at the end of 1997.
  • Trading in London was dominated by selling, with April North Sea Brent crude futures on the International Petroleum Exchange (IPE) losing 45 cents to expire at $12.31/bbl.
  • May IPE Brent, however, lost 68 cents to close at $12.37/bbl.
  • Nymex refined products, such as gasoline and heating oil, also saw significant price declines, with trading volumes remaining light.

Statistics:

*-April Nymex light, sweet crude futures closed at $13.28/bbl, a loss of 78 cents from the previous day's close.

*May Nymex crude closed at $13.65/bbl, a loss of 78 cents from the previous day's close.

*April IPE North Sea Brent crude futures expired at $12.31/bbl, a loss of 45 cents from the previous day's close.

*May IPE North Sea Brent crude closed at $12.37/bbl, a loss of 68 cents from the previous day's close.

Sources:

  • "New York Mercantile Exchange (Nymex) futures data"
  • "Commodity Futures Trading Commission (CFTC) Commitment of Traders Report"
  • "International Petroleum Exchange (IPE) futures data"

Read more