Global Oil Prices Hit Lowest Level in Four Months

Global oil prices have fallen to their lowest level in four months. Ongoing concerns about oversupply have pushed global oil prices down to their lowest level since March on Monday, August 12. The West Texas Intermediate (WTI) crude oil price fell by 68 cents to $46.44, while North Sea Brent crude dropped by $1.10 to $51.11. The United Overseas Bank of Singapore has reported that signs of increased production from major oil-producing countries are at their highest, while excess oil production in the market remains high. Oil prices began to decline after comments made on Friday by Abdullah al-Badri, the Secretary-General of OPEC, during a meeting with Russian Energy Minister Alexander Novak, stating that the Organization of the Petroleum Exporting Countries (OPEC) would not reduce production in response to falling oil prices. The report notes that the 12 OPEC members, particularly Saudi Arabia, are focusing more on maintaining their market share than supporting oil prices. OPEC members argue that continuing high levels of oil production will eliminate costly projects in other countries, such as U.S. shale oil. The strengthening of the U.S. dollar has also contributed to the decline in oil prices, as oil is priced in U.S. dollars in global markets. The dollar's value surged following reports of an impending interest rate hike by the U.S. Federal Reserve later this year. Meanwhile, the Associated Press has reported that the release of reports regarding an increase in drilling rigs by American companies and weak economic indicators in the U.S. has also impacted the drop in oil prices. For instance, five drilling rigs were added to the active drilling fleet in the U.S. over the past week. This marks the fourth consecutive week of increases in the number of U.S. drilling rigs, while during the same period, oil prices have decreased by 21%. The U.S. Department of Commerce has also reported that construction costs in the country have only increased by 0.1% compared to July.