U.S. crude oil prices tumbled Friday, hitting their lowest levels in over two years due to signs that OPEC will keep pumping oil at high levels despite the market glut.
The November crude oil contract fell as low as $13.25 a barrel, its lowest since August 1986, before recovering a little ground to close with a loss of 55 cents at $13.37 a barrel.The sharp drop in oil prices this week was tied to growing concerns that the Organization of Petroleum Exporting Countries will fail to regulate production. Fueling these concerns were speculation that Saudi Arabia was no longer willing to curb production. In addition OPEC Secretary General Subroto was quoted as saying that prices could fall as low as $5 a barrel if the Saudis flood the market.
Barring any OPEC announcement on production cuts or an emergency meeting, U.S. crude prices could fall to $12.75 next week, said Stephen Platt, with Dean Witter Reynolds.
London oil prices fell to their lowest levels in 25 months on reports of high production by Saudi Arabia.