Oil prices sunk further in morning trade on Friday, falling on from Thursday’s 5 percent drop caused by fears of another oil glut.
WTI Crude is currently trading down 5.05 percent at $45.52, with Brent Crude down 4.98 percent at $48.38. The prices represent their lowest level since November last year, ahead of OPEC producers’ agreement to cut output.
The past two days of falling prices have largely erased all gains made in the last six months, as fears surface that OPEC will be unable to cut output further at the next meeting.
Despite agreements to cut output, excess oil continues to flood the market causing prices to sink. OPEC delegates hinted that increasing output cuts would be unlikely at their meeting on May 25th, but confirmed that current output cuts were likely to be extended.
“The market continues to hunt for a bottom,” Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut, told CNBC.
“We still have a near record overhang and signs of increasing production in areas of the world outside the producers that agreed to the cuts.”