Brent Remains Below $100 On Oversupply

Brent crude oil remained below $100 on Wednesday with market oversupply weighing on prices.

The commodity traded at $99.21 at 10:45 GMT as the dollar strengthened and investors worried about the state of the global economy.

For the moment, oil markets are oversupplied as stalling economies in Europe and Asia keep global demand depressed. Seasonal refinery maintenance in the U.S. has also depressed demand in the world’s largest consumer.

On top of that, CNBC reported that U.S. oil output is up to its highest level since 1986, further contributing to the global supply glut. The U.S. has traditionally imported around half of its oil consumption, but the nation’s shale boom is expected to take U.S. crude imports down to just 20 percent of consumption over the course of the next year.

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Brent prices aren’t expected to fall much farther below $100 as most OPEC members need the commodity to sell for at least $100 per barrel in order to balance their budgets.

A report from the American Petroleum Institute out on Tuesday lent some support to crude prices, as it showed that U.S. crude stockpiles declined by 1.9 million barrels last week, compared to analysts’ expectations of a 1.1 million barrel drop. Moving forward investors will be looking to the Energy Information Administration’s version of the same report for confirmation of the drop.

Also on the radar will be a meeting between Gulf Arab oil ministers, set to take place Thursday in Kuwait. On the agenda will likely be discussions about the commodity’s fall below $100 and how to keep prices afloat.