Oil prices drop as OPEC optimism dwindles

Oil prices drop as OPEC optimism dwindles

Global oil prices took a tumble yesterday as an OPEC report predicted stability would only return to the market in the second half of 2017.

This announcement comes just a week after the International Energy Agency (IEA) reported that markets would balance out before the start of the new year.

However, following the recent decision by OPEC states and 11 oil producing nations to limit their upcoming production levels, the new year target has been revised.

As a result, Brent crude prices dropped US$1.82 (3.27%) to $53.90 per barrel, while U.S crude settled at $51.04 per barrel, falling $1.94 (3.66%).

In the monthly report, OPEC called on non-member states to honour their reduction pledges.

If countries such as Russia and Saudi Arabia fulfil their promises, this “will accelerate the reduction of global inventories and bring forward the rebalancing of the oil market to the second half of 2017,” the report said.