Brent Falls Lower And The Drop Might Continue

Brent remained above $70 on Thursday morning as investors held their breath in anticipation of another drop. The commodity traded at $70.10 at 8:30 GMT after reports that prices could sink another $10.

According to Saudi Arabian officials, the commodity could have further to fall. The Wall Street Journal reported that the kingdom is forecasting that crude prices will drop as low as $60 per barrel before stabilizing.

Crude prices have been extremely volatile recently due to OPEC's decision not to cut output at last Thursday's meeting. The cartel was divided over whether or not a supply cut was in the its best interest, but in the end decided not to act. Though several of the group's members, like Venezuela, pushed for a cut to boost prices back above $100, Saudi Arabia said it would not cut down on its production unless nations outside of the cartel also agreed to cut back.

Meanwhile, U.S. Energy Information Administration released a report on Wednesday showing that the nation's crude inventories fell by 3.7 million barrels in the week ending on November 28. The report surprised, as most were expecting to see a 1.3 million barrel increase.

Moving forward, investors will likely proceed with caution when it comes to investment in the oil market. The growing global supply glut coupled with stagnant economic growth in both Asia and Europe has made the possibility of a rally very unlikely. So far, Brent prices have fallen 40 percent since June and there is a good chance the slide will continue.