Oil Prices Drop

On Wednesday Reuters reported that oil fell more than 4 percent.  This indicates the biggest drop in over two months.

In London, ICE Brent crude for January delivery settled at $105.02 a barrel. This price is $4.48 (or 4.09 percent ) less than it was in the beginning of October.

NYMEX January crude settled at $94.95 a barrel. This price is $5.19 (or 5.18 percent ) less than it was in September. It is considered U.S. crude’s biggest one-day percentage loss. U.S. crude fell below its moving average of $95.98 and settled at it’s lowest price. 

A new supply target agreed on by OPEC (the Organization of the Petroleum Exporting Countries) is a target of 30 million barrels daily. It is in line with current production. This agreement ratifies current production at near 3-year high. However, individual national quotas were not discussed.

Some analysts think that the drop in crude prices is due to the weakening Euro against the dollar. The European Central Bank is not buying more bonds of the European countries that are in financial trouble causing problems in the global markets. Gold also fell by about 4 percent. Other commodities tumbled down quite sharply as well causing investors to look for safer havens.