Oil price slides in global market as supply boosts

Unrefined oil prices fell on Monday in the global market under pressure from expectations of increasing supplies and a lower demand forecast amid higher energy costs.

The price of oil dropped below zero dollars per barrel during the pandemic of coronavirus, but as the situation normalised, the price of oil began to rise sharply across the world.

The price of per barrel of unrefined oil stood at $85 which was the highest record in the last seven years.

The oil price dropped to $4 per barrel in the last four days and now it is being sold at $80.69.

Brent crude futures fell 45 cents, or 0.6 percent to $81.72 a barrel. The US West Texas Intermediate (WTI) crude lost 36 cents, or 0.5 percent to $80.43 a barrel, reports Reuters.

Oil markets have dropped for the last three weeks, hit by a strengthening dollar and speculation that President Joe Biden's administration might release oil from the US Strategic Petroleum Reserve to cool prices, Reuters said in its reports on Monday.

“The White House has been debating how to tackle higher inflation, with some officials calling for the strategic reserve to be tapped, or halting US exports,” ANZ analysts said in a report.

The US energy firms this week added oil and natural gas rigs for a third week in a row with crude prices hovering near a seven-year high, prompting some drillers to return to the wellpad.

The oil and gas rig count, an early indicator of future output, rose by six to 556 in the week to November 12, its highest level since April 2020, energy services firm Baker Hughes Co (BKR.N) said on Friday.

Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month's forecast, as high energy prices hampered economic recovery from the Covid-19 pandemic.

Russia's Rosneft (ROSN.MM), the world's second-biggest oil company by output after Saudi Aramco, warned on Friday of a potential “super cycle” in global energy markets, raising the prospect of even higher prices as demand outstrips supply.