Brent Sinks To New Lows On Growing Glut

Brent crude oil was below $66 on Tuesday morning after falling 4 percent on Monday while markets worried about the growing global supply glut. The commodity traded at $66.99 at 8:20 GMT with  traders wondering where its floor would be.

Crude prices have been particularly volatile since OPEC’s decision not to make an output cut and most have revised their forecasts for the commodity to show prices below $70 for an extended period. Reuters reported that Kuwait’s national oil company said it was expecting crude prices to remain near $65 for the next six months, an indication that the nation is ready to accept new, lower prices.

In November, Saudi Arabia pushed for OPEC producers to maintain their output and allow the market to determine the commodity’s price. Officials from the kingdom have said the only way it would commit to an output cut would be if all producers, including those outside OPEC, agreed to cut down. With no such agreement in sight, Saudi officials reduced their prices for Asian and US customers, a good indication that the nation is trying to gain market share.

Meanwhile, economic data has been anything but encouraging for the commodity. The global economy has been struggling as both Asia and Europe face deteriorating economic conditions. With two of the world’s top three oil consumers stuck in an economic slump, analysts are not expecting demand to catch up with supply any time soon. With that in mind, some believe Brent prices haven’t found the bottom yet, and could fall as low as $60 in the coming weeks.