Tags: Kloza | crude | oil | price

GasBuddy's Kloza: 'Crude Oil Teetering on Brink of Collapse'

By    |   Tuesday, 14 October 2014 01:57 PM

U.S. crude oil prices have dropped to a two-year low amid bountiful supply and sluggish demand. And many experts expect the move to continue.

OPEC nations including Saudi Arabia, Kuwait, Iraq, Iran and the United Arab Emirates have helped spark the plunge by cutting prices to Asian and European buyers.

November West Texas Intermediate futures traded at $80.97 a barrel late Wednesday, down $0.81 from Tuesday.

"This is not your garden variety autumn price decline," Tom Kloza, chief oil analyst at GasBuddy.com, tells The New York Times.

"Clearly there is a rift in OPEC, and that means we are more likely to see a price war over the next six months. Crude oil is teetering on the brink of collapse."

"Saudi comments indicate that it may have shifted from a strategy of holding prices at around $100 a barrel to a focus on market share," Jeff Dietert, head of research at Simmons & Co., an independent investment bank, tells The Times. "That means there is not an immediate floor on oil prices."

Others too say the oil cartel is in disarray.

"OPEC is still giving no indication that it might take steps to shore up prices," Carsten Fritsch, an analyst at Commerzbank, says in a report obtained by Bloomberg. "OPEC countries appear to be more interested in defending their market shares at present than stabilizing prices."

When it comes to gasoline, the average national price for regular has fallen to $3.19 a gallon from $3.34 a year ago. And Kloza sees the price sliding to $2.95 to $3.10.

Crude output is booming, particularly in the United States, thanks to the shale revolution. And weak economies overseas are putting a dent into demand.

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U.S. crude oil prices have dropped to a two-year low amid bountiful supply and sluggish demand. And many experts expect the move to continue.
Kloza, crude, oil, price
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2014-57-14
Tuesday, 14 October 2014 01:57 PM
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