The daily basket price of crudes produced by the 13 members of the Organization of Petroleum Exporting Countries fell to $29.71 a barrel on Wednesday, down from $31.21 the previous day, the group said in an e-mailed statement. That’s the lowest level since February 2004, according to data compiled by Bloomberg. Oil has slumped further this week as a selloff in Chinese markets added to concerns about the strength of the nation’s economy. WTI crude, the U.S. benchmark, has had its worst-ever start to the year, deepening the economic pain for OPEC’s weaker members such as Venezuela.
Crude oil continued to trade higher on April 28. It was supported by the weaker dollar. At 3:00 PM EST, the West Texas Intermediate crude oil futures contract for June delivery was trading at $46.02—a gain of 1.5%. Brent crude was trading at $47.76—a rise of 1.8%.
The dollar weakened on April 28 against all of the major currencies. According to data released by the Bureau of Economic Analysis at 8:30 AM EST, the US gross domestic product growth for 1Q16 was 0.5%. This is the weakest first quarter growth in two years. The slowdown in the US economy weighed on the dollar on April 28. In addition, the dollar fell as the Bank of Japan decided to keep the interest rates unchanged at its April meeting. Before that, the Fed’s decision to keep the interest rates unchanged also weakened the dollar. These three factors pulled the dollar lower and supported crude oil prices on April 28.
According to recent statements given by major economic figures, the oil market is expected to attain a supply-demand balance in 2H16. The commodity outlook report of World Bank, the International Energy Agency, British Petroleum’s (BP) CEO and director, Bob Dudley, announced similar statements on the outlook for the crude oil market. Read What Does the IEA Expect from the Oil Market? to learn more. This depends entirely on the production of OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC nations and ramping up of production to attain Market share. This is triggering all of the doubts in the Market.