The oil price has continued to plunge today, racking up its 6th straight day of losses on the back of increased oil production from the US and worry over OPEC’s meeting this month where further production cuts are on the agenda.
Although OPEC members are expected to agree to reduce production further, it’s the Non Opec members such as Russia that has the market jittery at the moment, with some predicting that not all will jump on board,
"While the cartel is expected to extend a self-imposed production cap by another six months, it will be a challenge to convince several non-Opec members to follow suit," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics.
Oil has also been hit by the increase in oil production from the US with data earlier in the week released from the EIA showing inventories falling by 930,000 barrels, against expectations for a fall of 2.3 million barrels and shows American producers have no plans to slow down.
"The drilling activity has been very robust, and a lot of that has come from non-publicly reporting companies and started to see evidence that publicly reporting companies were adding rigs," said Michael Cohen, head of energy commodities research at Barclays.
Oil is likely to continue its downtrend and stay under pressure until May 25th when OPEC members meet and the results are known about further production cuts.
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