Oil prices fell to multi-month lows on Friday (9 November) amidst spike in global supply and investor worry resulting in it slipping below the $70 mark, Reuters has reported.
The benchmark Brent crude slipped below $70 a barrel for the first time since early April, down more than 18 per cent after reaching four-year highs at the beginning of October.
Brent fell 95 cents to a low of $69.70 before recovering slightly to trade around $69.85 by 10.30 GMT, down 4 per cent for the week and more than 15 per cent this quarter.
The decline follows a surge between August and October when crude rallied ahead of the re-introduction of sanctions against Iran's oil exports on 5 November.
CNBC reported that fall of oil price is driven by rising supply and concerns over an economic slowdown. It quoted analysts at Bernstein Energy as saying that, “As OPEC exports continue to rise, inventories continue to build which is putting downward pressure on oil prices. A slowdown in the global economy remains the key downside risk to oil”.
Contrary to initial fears, sanctions against Iran, a major producer of oil, are unlikely to dent oil supply as Washington has quickly moved to grant exemptions to Iran's biggest buyers including India and China which will allow them to continue buying limited amounts of crude for at least another six months.
The US Energy Information Administration (EIA) also forecasted that the nation’s oil production in 2018-19 will be greater than previously predicted.