OPEC to hold emergency meeting if oil prices fail to recover

On the Intercontinental Exchange (ICE), Brent crude for January delivery wavered between $36.76 and $38.68 a barrel, before closing at $38.15, down 0.17 or 0.49% on the day.

Crude oil prices have fallen below $35 a barrel, the first time it has reached that level since February 2009.

OPEC, or the Organization of Petroleum Exporting Countries, is an inter-governmental organization of 13 major oil producing countries which together produce about 40 percent of the world’s crude oil.

Brent, the global benchmark, was at $37.74 at 4.40am GMT, down 18c from its last settlement after rising slightly earlier on Tuesday. Brent crude drilled in the North Sea dropped as much as 3.5 percent, trading at $36.61 at one point, although it also moved a bit higher in later trading.

CRUDE oil futures fell for a seventh straight session yesterday, their longest losing streak since mid-2014, as a forecast from the International Energy Agency (IEA) that the global supply glut was likely to deepen next year dragged on prices.

Global oil demand will rise by about 1.3m barrels a day next year, higher than the previous estimate by Moody’s, as consumption increases in the US, China and Russian Federation, the agency forecast.

“The quarter ahead looks a good deal more bearish than the quarter just ending”, New York-based managing director Ed Morse said in the report.

The U.S. benchmark rose Monday on speculation that Congress could lift the 40-year-old ban on most U.S. crude exports as part of a broader spending bill.

What’s more, Federal Reserve interest rate decision is getting closer. Crude, priced in United States dollars, typically falls as the dollar strengthens since it becomes more expensive for buyers paying in other currencies.

All of this explains why some are bracing for even lower prices.

Another risk facing crude markets was the potential for oil exchange-traded-funds to unwind their assets under management, which could spark another sell-off, Morse said.

Schneider Electric energy industry analyst David Hunter said: “The recent dip in oil prices is significant enough to suggest that the market is spooked by Opec’s meeting last week and there could be further reductions to come”.

A fear of USA production increases also looms – while the latest data has shown that US production is falling, shale production can respond quickly to price increases, so that any rally could be met with a production increase.