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Oil prices hover near 11-year low

Oil prices hover near 11-year low
Rachit Hirani Rachit Hirani Wednesday 30 December 2015, 12:03 PM

Oil prices are hovering around the 11-year old pricing and they still remain under pressure as the global demand has been slowing down and the supplies are abundant. Saudi Arabia isn’t making any changes in its oil policy while Iran is looking at enhancing its exports.

The international benchmark Brent and US WTI crude prices are edged up after they fell by three per cent at the start of the week to below $37 for a barrel. Brent was a dollar away from its 11-year low of $35.98 that it reached last week. Both the cruse benchmarks have come down by two-thirds since the price has started to come down from June 2014.

Saudi Arabia has announced to cut its record $98 billion state budget by reducing spending cuts to raise revenues. Analysts from Bank of America Merrill Lynch said in a note, ”The budget likely signals no near-term changes to energy or foreign exchange policies.”

Oil analysis firm ClipperData stated, ”The ongoing low oil-price environment points furiously towards a rough 2016 for US producers," with some estimates pointing to a 500,000 bpd fall in US production in 2016. The drop in fuel prices will be some relief for some car buyers in India and this is a good news for the auto industry as it will encourage more people to buy new cars.

 

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