Dubai, 15 October 2014 - Oman crude oil prices on the Dubai Mercantile Exchange traded below $85/barrel Wednesday for the first time in nearly four years, as the four-month long oil market retreat continued with more than $4/b wiped from the previous day's official DME Marker Price - the biggest one-day fall in over two years.
The front-month December DME Oman futures traded at a low of $83.06/b before settling $4.28/b lower on the day at $83.74/b 12:30 Dubai time, with more than 3,000,000 barrels traded during the pricing window.
Front-month DME futures were last below $85/b in December 2010, but since then the average yearly price has topped $100/b. Prices in 2014 peaked above $111/b in June but have now fallen by over $27/b in four months, or close to 25%. The average 2014 price of Oman crude to date is $103.43/b.
The latest losses came after the International Energy Agency cut its forecast for oil demand growth to its weakest level in five years. In its monthly report released Tuesday, the Paris-based agency said it expects oil demand this year to rise by 700,000 barrels a day, down from its previous estimate of 900,000 barrels a day. At the same time, the report said oil production rose by almost 910,000 barrels a day last month.
Christopher Fix, Chief Executive of DME, said: "We're witnessing a retreat similar to the one we saw in 2012, which wiped around $30/b from crude oil prices. The macroeconomic climate remains extremely weak, so oil markets are looking to next month's OPEC meeting to see how the key producers will tackle the current oversupply situation."