Oil collapses below $45 as U.S. shale output confounds OPEC

Oil slid below $45 a barrel for the first time since OPEC agreed to cut output in November as U.S. shale confounds the producer group’s attempts to prop up prices.

In less than 10 minutes on Friday, futures slumped more than $1 amid a surge in volume. They have collapsed 9.3 percent this week, sliding to the lowest since Nov. 15 -- two weeks before the Organization of Petroleum Exporting Countries signed a six-month deal to curb production aimed at easing a global glut. The decline is being driven by expanding U.S. output before OPEC is set to decide whether to prolong its cuts.

Prices are still more than 50 percent below their peak in 2014, when surging shale output triggered crude’s biggest collapse.

Energy companies led losses among equities in Asia during the Asian markets session.

U.S. crude production rose to 9.29 million barrels last week, the highest level since August 2015, according to the Energy Information Administration. While OPEC is likely to prolong curbs for a further six months, American shale supply remains a concern, according to Nigeria’s oil minister.

OPEC will meet May 25 in Vienna to decide whether to extend supply cuts through the second half.

Source: Bloomberg

Junior Trader Ivan Ivanov

Read more:

• Oil fundamental and inertia can push prices to new highs
• Goldman Sachs: “Gold is a better hedge than oil in current market conditions”
• Golden years for Gold
• The end-of-year gold rally continues at full speed
• Gold goes over $ 1,500, big players with estimates for the next year