oil prices near december two thousand
eight lows this week as traders saw no
sign of an end to a persistent
oversupply around the world global
benchmark brent crude and the u.s.
marker west texas intermediate have
tumbled since the meeting of OPEC
ministers at the start of the month and
both are now hovering around thirty
seven dollars a barrel this could within
the group about which member should cut
production to shore up the oil price has
led to a continuation of opec's existing
policy to keep on pumping although
production both outside the cartel has
slowed dramatically and made low oil
prices OPEC producers have increased
output the scrapping of the group's
official ceiling this month took away
any pretense of production constraint
adding to the bearish sentiment in the
market although cheaper oil is a boon
for kasuba countries from the u.s. to
the UK and China a prolonged slide is
detrimental to producer nations for
example Venezuela Nigeria and even
financially stronger Gulf economy such
as Saudi Arabia at the same time the oil
price collapse has battered the balance
sheets of the world's biggest energy
companies that have been forced to slash
hundreds of billions of dollars in
future investment and cut thousands of
jobs energy stocks have been hit hard to
buy the oil slump highly indebted US
shale drillers and the banks that lend
to them are also suffering with much of
the junk bond energy sector currently in
distress bankers in the USA they are
cutting the borrowing limits of
exploration and production companies by
as much as twenty percent as the value
of their reserves have fallen sharply
there is a concern a lengthy period of
cheap crude could trigger widespread
defaults with crude inventories set to
rise even further over the next year as
storage facilities on land reached tank
tops with analysts are finding it
difficult to be optimistic about the
price