Brent oil dives below $41 a barrel, lowest in 7 years

ANKARA

Brent crude oil price fell below $41 a barrel late Monday after OPEC failed to declare an official output quota at its meeting last Friday and supply remained high.

The price fell to as low as $40.61 per barrel around 6.20 p.m. U.K. time (1820GMT), marking a 5.4 percent fall during the day as crude reached its lowest level since December 2008.

Meanwhile, the American benchmark West Texas Intermediate fell to $37.51 per barrel around the same time, losing 5.2 percent over the day - its lowest since February 2009.

“The catalyst has been the OPEC meeting on Friday,” Richard Mallinson, a geopolitical analyst at London-based energy consultancy Energy Aspects, told Anadolu Agency.

“Although it was evident the group didn't cut production, the confusion in the cartel was seen negatively by the market.”

Before OPEC's annual meeting last Friday, the market had mostly anticipated the official quota would stay at 30 million barrels per day (mbpd).

However, OPEC did not declare a quota, announcing instead that it would maintain production at actual output levels, which was at 31.4 mbpd in October.

“OPEC's meeting needed to start discussing how to make the quota system effective again but OPEC was unable to achieve that,” Mallinson said.

In addition, the glut of oil on the global market continues to increase - exerting downward pressure on oil prices.

In the U.S., crude oil inventories increased for the tenth consecutive week, the U.S. Energy Information Administration revealed last Wednesday, reaching 489.4 million barrels.

“Oversupply continues in the market with high storage levels,” Mallinson said. “This created the negative sentiment in the market.”