European Brent crude oil for the first time since 2004 fell below $ 35 a barrel. The minimum price was $ 34.20. The American WTI oil also fell critically; it dropped to a few cents below the price of $ 34.00 per barrel.
Both brands have fallen nearly 4% this week.
On Wednesday, the US Energy Information Administration reported that the overall level of crude oil inventories fell last week by 5.1 million barrels. At the same time, gasoline supplies in the US increased sharply last week (10.6 million barrels), adding fears over a slowdown in demand for petroleum products.
The overall level of crude oil stocks in the United States amounted to 482.3 million barrels last week, keeping close to the highs for this period in the last 80 years.
According to Bloomberg, the sharp drop in prices is also linked with the messages that the PBOC lowered the Yuan to four-year low. This suggests that the economy needs to be supported by stimulating exports.
The oil offer on the world market is still ahead of demand due to the boom in shale oil in the United States and after the adoption by OPEC of the decision to maintain the current quota for the production of raw materials at record levels despite the saturation of the oil market.
Most market analysts believe that the global saturation is only getting worse this year because of the growth in production in Saudi Arabia and Russia.
Oversupply of raw materials will continue to worsen as soon as Iran will return to the world oil market early next year after the lifting of Western sanctions. Analysts predict that the country can quickly ramp up production to a level of 500 000 barrels, increasing the saturation of the market which has brought down prices.