Crude prices are indicating new downward trends as the leading price indicator- the Brent has recorded its lowest since 2009. Europe’s Brent has registered $39.8 /barrel on Tuesday trade.
In the US, the WTI (West Texas Intermediate) is already sub-$40 and is trading around $37.
New lows are a worrying symptom for crude prices over the last two years. Its continuous decline reflects the general situation of commodity price reinforced recession. Surprisingly, little efforts are made by the biggest cartel in the world – the OPEC, for stopping the price fall.
OPEC seems to be a divided alliance amidst negative factors working against crude prices. Already, OPEC has lost its clout amidst larger output outside the cartel. The US and Russia are big players and comes at Number two and three positions after Saudi Arabia. Political divisions within OPEC are a stumbling block for the cartel to check price fall. Iran’s reentry into mainstream trade makes it difficult to force a price cutting decision within the OPEC.
But many strategists point out that crude is already under severe attack from the renewable energy revolution and potential emission cutting plan by countries. The Paris COP may bring agreements for the substitution of fossil fuel by renewable.