Both the major crude oil indexes are trading lower again on Friday morning.
Brent crude touched a new 4-year low at $US76.79, $US4 less than what it was trading on Nov. 13.
The last time the Brent fell so far was in 2010.
It’s now trading a little higher at $US77.45
WTI crude is in similar waters. The per-barrel price is currently running at $US73.62, after falling down to $US73.32 in the early hours of Friday morning.
The price fell 3.66 percentage points yesterday alone.
The crude price being so low could have important consequences for the US markets: shale oil needs crude to trade at more than $US76 in order to be profitable.
A lower rate could simply close down a lot of shale production: for this reason, analysts has alleged that the OPEC cartel of offshore oil producers has agreedto let the crude price fall this bad in order to defend their share in the US market. Saudi Arabia, world’s largest oil producer, has dismissed this allegation.
At the end of October, Goldman Sachs reported that a decline in crude oil to $US75 would start to significantly cut US shale growth. At the moment offshore crude trades between $US73 and $US74.
Here is a long term chart of crude oil prices since the start of 2014. The tag indicates when the price fell below $US76.
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