OPEC continues to pump near record oil causing prices to remain near 7-year lows in early Asian trading on Tuesday, and worsening a glut that has already seen hundreds of thousands of excess barrels produced on a daily basis. OPEC said Friday it would maintain current production levels for the next six months even as a worldwide supply glut shows no signs of easing.
U.S. crude was trading at $37.83 a barrel at 0032 GMT, up 18 cents from its last settlement but close to the 2015 and 7-year lows of the previous session.
Benchmark Brent and WTI futures dropped over 6 percent the previous session to reach 2015 lows, and they were close to levels last seen during the credit crunch of 2008/2009. Analysts say that if they continue through 2008/2009 lows, the next downward target would be levels not seen since the early 2000s.
According to Sanjiv Shah, Chief Investment Officer of Sun Global Investments, "The decision by OPEC-members to keep oil production output at record high levels ... suggested that the organization was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term."
Canadian Dollar
The plunging oil prices dragged the Toronto stock market down by more than 300 points on Monday-- about 2.4 per cent — as the Canadian dollar fell to its lowest levels in more than a decade.
The oil-sensitive loonie dropped nearly 0.8 of a cent from Friday’s close to end the day at an even 74 cents U.S. That’s the lowest the Canadian dollar has been against the greenback since June 2004.