Oil Prices Decline in Four Day Slide

For four consecutive trading days, the price of oil has been on a slow but steady decline. On Wednesday, the price of a barrel of West Texas Intermediate oil fell to $37.16, the lowest price since a major but short-lived price drop in 2009. As a global glut of crude oil continues to drive prices down, many producers are trying to stabilize prices to a more normal level.

The continuing decline in the price of crude oil is partially due to the failure of OPEC to agree on an output ceiling during a conference earlier this month. While many member states were in favor of an output cap to bring prices back up, Iran refused to agree to the measure. The Middle Eastern country, whose market has long been restricted by sanctions from many countries, is now hoping that a booming oil export market will help it to grow its newly opened economy. This refusal has prompted OPEC as a whole to refuse to cap production, resulting in the highest output in three years and the prediction that world oil reserves will only increase in 2016.

The price decline is also affected by the output of non-OPEC states such as Brazil and Russia. Earlier this year, many non-OPEC countries considered the possibility of collectively lowering their own production to stabilize world oil markets by combining their market shares against OPEC. However, these nations have continued to produce at increased rates, making the global oil glut all the more devastating. At present, there is no indication that either OPEC or its competitors are prepared to let up on production, even as oil prices continue to slide.