Crude oil futures prices Friday reversed early gains and continued tumbling to their lowest levels in nearly a decade on the New York Mercantile Exchange.
Oil futures again posted their lowest prices since October 1988 on skepticism world oil producers will cooperate fully to end a supply glut.After two rounds of cutbacks that have resulted in pledges to take about 2.35 million barrels a day of crude off the market, market participants say that still is not enough to reduce ample U.S. supplies in the face of sharply lower demand from Asia.
When 10 of the 11 members of the Organization of Petroleum Exporting Countries in late March announced a first round of cuts in cooperation with Norway and Russia, analysts predicted 3 million barrels of oil a day would need to be taken out of the market to reduce supplies.
Since then, that figure has gone higher because U.S. refiners have bought all the cheap supplies they need and the Asian situation has been worse than originally believed. Complicating the situation are growing fears that some countries have failed to adhere to their pledged cuts, resulting in the cheating and overproduction that helped bring about the problem of weak prices in the first place.
Light sweet crude oil for delivery in July settled at $12.59 a barrel, down 16 cents at the New York Mercantile Exchange.