Zee Media Bureau
Oil prices fell to a fresh six and a half year low in international markets Thursday, approaching the key USD 40 a barrel level after a surprise rise in US inventories added to concerns of a supply glut.
US benchmark West Texas Intermediate (WTI) for delivery in September, which expires Thursday, dipped 26 cents to USD 40.54 in mid-day trade after falling sharply in New York to its lowest level since March 2009. Brent crude for October dropped 24 cents to USD 46.92 a barrel.
Here are the 5 key reasons of oil price decline:
-Surprise rise in US inventories
US crude inventories rose 2.6 million barrels last week to 456.21 million barrels, the government`s Energy Information Administration said.
The figures stunned energy market analysts, as well as traders and investors who had been expecting a stockpile drawdown despite the peak US summer driving season nearing its end and refinery problems cutting fuel processing capabilities.
Apart from US inventories, some other factors are also making pressure on oil fundamentals.
-Slowing demand from China
-Rising US dollar
-Iran nuclear agreement
-More production from Russia