Oil prices plummet to seven-year lows on global supply glut

However, US production of shale-oil is expected to decrease by 116,000 barrels a day to 4.861 million barrels a day in January, according to the monthly data released by the US government.

The failure to agree production levels means OPEC core members are readying for new battles for share in the market already heavily oversupplied and consuming nearly 2 million barrels per day less than it is producing.

“Low oil prices will continue to weigh on the sovereign credit profiles of major exporters in 2016”, rating agency Fitch said.

(STANDUP) “With Iranian oil jumping into the market early next year, global oil prices are likely to get slammed, sliding even further, raising concerns in Korea that a further drop will delay a recovery in the country’s leading export sectors like shipbuilding, steel and machinery”.

“I think the reality that you’re seeing in the oil markets today is the realization that this oversupply situation is one that’s going to be with us for some time going into 2016 as well”, said Birn. US crude was trading at $36.86 a barrel, down 79 cents from its last settlement. They also said that lower oil prices could serve as a tailwind to Japan for lower energy prices, but the Japanese market could suffer a ripple effect as long as investors avoid risky assets. This is mainly due to the results of the meeting of the oil cartel OPEC over the weekend, which again failed to reach agreement on reducing oil production in order to cope with declining demand and adjust prices upwards.

“The rising probability that markets may need to adjust through “operational stress”, when surpluses breach capacity, leaves risks to our forecast as skewed to the downside in coming months, with cash costs near $20 per barrel”, the bank said.

Oil prices recovered losses this morning, drawing a line under two days of turmoil prompted by indecision from the Organization of the Petroleum Exporting Countries.

The cedi will also be significantly affected if the prices of oil continues to decline. That simply tells us it’s far too early to seek a bottom in oil prices.

“Price levels just aren’t high enough for many shale producers to hedge”, said Mark Keenan of Societe Generale.

But the effects on energy and commodities firms have been devastating – hitting investment and jobs – with Anglo American the latest to announce a dramatic scaling-back in its future plans to help it account for the collapse in prices.