By early evening in Europe, US light sweet crude was down more than $3 at $103.26, while Brent crude was $4.14 lower at $99.30. Prices had hit a record of $147 a barrel in July.
Several factors have contributed to the decline –most recently a pledge from Chakib Khelli, president of the Organisation of Petroleum Exporting Countries (Opec), that the cartel would not cut production. Mr Khelli, the Algerian Oil Minister, told an Opec conference in Vienna: "We are going to stay with the level of production where we are now."
Comments by Saudi Arabia, Opec`s chief producer, that the market was "fairly well-balanced" also suggested that output would be unchanged. This led the financial markets to conclude that, for now at least, oil will stabilise at about $90 to $100.
That is still 50 per cent higher than last year and about 10 times what it was a decade ago, but the possibility that inflation may soon abate will be widely welcomed. Courtesy:The Independent
Source: PETROLEUM BAZAAR