Brent crude oil dipped for a second day in a row on Tuesday following increase drilling activity in the US and among OPEC members.
Brent oil plunged from 26-month high of $58.50 a barrel in September to $55.64 on Tuesday as of 11:51 p.m Nigerian time. While West Texas Intermediate oil declined by 2.65 percent to $55.30 per barrel.
Global crude oil prices rose in September on Turkish threat to block Kurdistan crude supplies for holding a controversial referendum.
However, a survey conducted by Reuters showed crude oil output rose among OPEC members in September, mainly from Iraq and Libya. This publication coupled with bearish sentiment from the US weighed on prices.
“The US rig count shows increased drilling activity after weeks of stalling,” said Norbert Ruecker, head of macro and commodity research at Julius Baer.
Increased oil rigs fit the expectations that shale oil production could once again disrupt OPEC strategy and impact global oil prices.
Again, weak investment in the energy sector and the general drop in global commodity prices last week continue to cast doubt on oil outlook going forward.
Bijan Namdar Zanganeh, Iran’s Oil Minister said “Changes are really related to Libya and Nigeria and the 100 percent compliance of everyone. OPEC’s actions are working and compliance is acceptable overall, although there needs to be some change.”
Organization of Petroleum Exporting Countries said Nigeria and Libya exemption stands until the two nations can sustain their production levels.