Oversupply, slowing demand, and financial turmoil are adding up to another round of price declines for crude oil. Brent was down below $34 per barrel on Thursday, but other benchmarks are actually selling much lower than that. OPEC’s basket price dropped below $30 per barrel on January 6, breaking through a key psychological threshold. The daily basket price sold for $29.71 per barrel on Wednesday.
Western Canadian Select, which tracks heavy crude in Canada, fell to $19.81 per barrel on January 6. Some high-cost Canadian producers including Baytex Energy Corp. and Canadian Natural Resources Ltd., have already shut in more than 35,000 barrels per day because prices too low. “We’re below shut-in levels” Tim Pickering, founder of Calgary-based Auspice Capital Advisors Ltd., told Bloomberg News. “We’re the last barrel produced and we’re the first barrel shut in.”