Oil price drops below $70 per barrel — lowest since December 2021

Brent crude oil price has dropped below $70 per barrel for the first time since December 2021.

During trading hours on Tuesday, Brent crude, the global oil benchmark, dropped by 3.45 percent to $69.36 per barrel.

On the other hand, West Texas Intermediate (WTI) fell by 3.86 percent to $66.06 a barrel.

According to a Bloomberg report, adverse economic statistics from the United States (US) and China — notably the dismal import numbers that were made public on Tuesday — have stirred fears about the demand for oil in the top two consumers and increased the likelihood that there will be a surplus in the coming year.

The publication said the fear was compounded by surging output in producing nations outside the Organisation of Petroleum Exporting Countries (OPEC).

The decline in the oil price comes five days after OPEC and its allies (OPEC+) postponed plans to increase production by 180,000 barrels a day (bpd). 

According to OPEC, countries, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, decided to extend their voluntary cuts of 2.2 million bpd until November.

Thereafter, OPEC said the cuts would be gradually phased out on a monthly basis starting December 1, “with the flexibility to pause or reverse the adjustments as necessary”.

The oil cartel said overproducing countries also reconfirmed their commitment that the entire overproduced volume will be fully compensated for by September 2025.