Oil futures took a deep plunge in Wednesday which ended to a three day-straight monthly loss, putting emphasis on the investor’s beliefs that the extended production cuts by the OPEC members and the start of the driving season in the U.S. will not be enough to reduce the global oil supplies.
After today’s plunge after the decisions of the OPEC members and other major producers, like Russia have put pressure on the U.S. oil benchmark and has hindered oil futures to reclaim the $50 per barrel level.
The initial OPEC-led production cuts has done little to cut global inventories, and the initial price jump after the deal was announced six months ago aided in stimulating the new U.S. drilling activity and to send oil productions there rebounding after last years decline.
The latest data from the Energy Information Administration shows that the U.S. production had an average of 9.3 million barrels per day, which was 6.3% higher comparing to last years production levels.
July futures for the West Texas Intermediate crude slipped by $1.34 a relative 2.7% drop which settled at $48.32 per barrel in the New York Mercantile Exchange while Brent Crude on London’s ICe futures exchange was down by 3.4% for the month ending the market session at $50.76, a $1,48 loss or 2.8% decrease in the benchmark’s price per barrel.