A pessimistic forecast from OPEC about future U.S. oil production pushed the price for West Texas Intermediate near to its six-year low in Monday trading.
Prices for WTI in early 2009 hovered in the upper $30 to low $40 per barrel range before eventually surging above the $100 per barrel mark in mid 2014. Markets in mid-2014 started favoring the supply side as U.S. oil production started moving closer to a 40-year record.
Market optimism has waned in recent weeks as prospects for the global economy, and thereby demand, dwindled. The Organization of Petroleum Exporting Countries said in its monthly market report for March there were still lingering concerns about the overall health of the European economy.
On the future of the shale industry, the 12-member group said the low price of oil may eventually curb U.S. production. Because of the prospects of a sustained period of low oil prices, "a drop in production can be expected … possibly by late 2015," the market report read.
A slowdown may already be emerging. A monthly report from the state government in North Dakota, the No. 2 oil producer in the country, said oil production in January, the last full month for which data are available, was 1.19 million barrels per day, down 2.5 percent from the all-time high reported in December.
The low price of oil has forced some in the industry to eliminate jobs and cut back on spending in exploration and production. OPEC's pessimism about the resiliency of the U.S. energy boom pushed the price for WTI down nearly 1.4 percent from the previous close to around $44.80 in early Monday trading.
OPEC said overall demand for oil and global economic growth expectations were steady. The price for Brent, the global benchmark for crude oil prices, was not spared during Monday trading, losing close to 1.5 percent of its value from the previous session to trade near $54.60.
Brent is still nearly $10 per barrel above its Jan. 13 low.
