Oil Falls below USD 35/Barrel for First Time since 2004

World | January 6, 2016, Wednesday // 17:28|  views

The Brent crude oil price fell below USD 35 a barrel for the first time since 2004 on Wednesday as global oil supply glut and the escalating tensions between major producers Saudi Arabia and Iran have dimmed prospects for cuts in output.

The price of the world's benchmark crude fell to USD 34.83 a barrel for February delivery in early trading, which is a level not seen since 1 July 2004. Later, the price returned to USD 35 a barrel.

Oil prices now are just a third of what they were in July 2014, when they hit USD 115 a barrel.

Last year’s decisions of the Organisation of the Petroleum Exporting Countries (OPEC) - in June and December -  to maintain production in the face of falling prices have led to persistent oversupply.

Currently, the stronger U.S. dollar is depressing prices further because it makes oil more expensive for buyers using weaker currencies, slashing demand.

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Tags: oil, brent, oversupply, Iran, Saudi Arabia, production, demand, output

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