West Texas Intermediate (WTI), the benchmark for the light sweet crudes produced in T&T, sank US$2.14, or 5.9 per cent, to US$33.84 a barrel yesterday, its lowest since February 2004. Brent crude, the benchmark for international oils, fell US$2.08, or 4.6 per cent, to $34.34 a barrel.
A stronger US dollar was among factors that dented prices because it makes oil more expensive for buyers using weaker currencies, thereby weighing on demand.
Since mid-2014, oil prices have been trending mostly downward from highs above US$100 in mid-2014 as abundant supplies were exacerbated by strong output by Opec and the United States. Last year, the oil market tumbled by about one third after Opec, which pumps more than a third of global oil, refused to cut output in June and December.
Declining oil prices have had a negative effect on T&T’s energy based economy which has experienced four quarters of decline is forecast to shrink by approximately to per cent.