As Both ICE Brent and NYMEX West Texas Intermediate traded under the $28 per barrel mark before slightly recovering today, the overall oil oversupply and consequently weak prices remained the centre of discussion at the World Economic Forum today. Spiking fears is the statement from BP PLC’s (NYSE:BP) Chief Executive Officer and director, Bob Dudley, who expressed the possibility of oil sinking below $10 a barrel.
The statement comes after a similar forecast was released by Standard Chartered Bank earlier this month. However, Dudley has maintained that any such extreme fall would be unsustainable and expressed confidence that prices will rebound by April or May. Dudley inspired some calm by stating that oil can touch the $30-$40 zone by mid-year.
Brent Crude was seen trading at $27.61 today while Nymex futures fell as low as $26.76 level before recovering. The American Petroleum Institute has already reported a huge oil stockpile of 4.6 million barrels last week.
Meanwhile, the International Energy Agency (IEA) has already indicated that there will be no relief from oversupply woes throughout the year. Now eyes are set on a new report to be published by the U.S. Energy Information Administration office for an update on storage data. According to ANZ bank, oil could test new lows if the storage update is discouraging in terms of available space.
The commodity has kept global markets under pressure as Asian markets opened sharply lower, following by the U.S. stock markets which continue mixed today, hovering between losses and gains after yesterday’s panic selling. The S&P 500 finished 1.17% lower at 1,859.33 yesterday, testing its lowest level since October 2014. The Dow Jones Industrial Average too closed the previous session 1.56% lower at 15,766.74 points. The iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) settled the previous session 1.25% or 0.07 points lower at $5.51.