Dubai, 1 December 2014 - Oman crude oil prices on the Dubai Mercantile Exchange closed below $70/barrel Monday for the first time in more than four years, with prices plunging by around $9.50/b in the last three trading sessions as OPEC’s decision not to cut oil production weighed heavily on the market.
Front-month DME futures were last below $70/b in July 2010.
The new front-month February DME Oman futures contract closed 12:30 Dubai time at $67.23/b, down $3.07 on the previous close and the lowest closing price since September 2009. The December contract, which expired on Friday, briefly traded below $70.00/b before rebounding to settle at $70.47/b.
Prices peaked this year peaked above $111/b in June but have now fallen by over $40/b in four months, or almost 40%. The average 2014 price of Oman crude as of close of business Friday is $100.32/b.
The latest losses came after OPEC said its members had agreed to roll over the ceiling of 30 million barrels per day, at least 1 million above OPEC's own estimates of demand for its oil next year.
The monthly average price of the DME for November, which is used by Oman and Dubai to set their Official Selling Price (OSP) was $78.24/b, down $8.72/b (10%) from an average of $86.96/b for the December contract traded in October -- and the lowest OSP since October 2010 when the average was $80.52/b.
Christopher Fix, Chief Executive of DME, said: : “OPEC’s decision to maintain production at current levels is a clear signal to let the market find its own level, now the market will be watching carefully to see at which price level the market comes back into balance.”
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