Brent Slides Toward $71 After OPEC Meeting

Brent crude oil looked poised to end the week near $71 after OPEC decided to maintain its output during its annual meeting on Thursday. The commodity traded at $72.07 at 8:40 GMT as investors saw very little chance of an increase with the global supply glut continuing to grow.

On Thursday, OPEC held its annual meeting at which the groups’ members discussed whether or not to cut its output. In the lead up to the meeting, it was clear that the cartel was divided with some members calling for a cut and others saying they were comfortable with low prices. Reuters reported that the five hour meeting ended with the group’s members locked into a price war in an effort to gain market share. 

Without a cut to production, analysts are expecting to see the global supply glut grow if the global economy continues to stall. Most see Brent prices remaining below $80 for an extended period, with some forecasting prices to drop below $70.

Meanwhile, data from Europe confirmed that the region’s economy was struggling, which in turn will likely reduce the eurozone’s consumption and push the European Central Bank into a quantitative easing package. Inflation data out on Thursday showed that Germany’s consumer prices had increased by only 0.5 percent annually in November, the nation’s slowest increase in nearly five years. Also concerning was consumer price data from Spain, which showed a 0.5 percent decrease in consumer prices in November.

Moving forward the global economy will likely become a driver of prices as there are very few risks to supply output.