Industry More Cautious on Prices as Oil Tumbles

The sharp drop in oil prices Wednesday may have crushed some speculative traders but did not come as a big surprise to some oil industry executives who have been planning for price volatility.

The crushing 5 percent decline came a day after OPEC and non-OPEC members reaffirmed their commitment to cut production but stopped short of saying they would extend the six-month agreement when OPEC meets in May. Instead they said they would review the situation and weigh the supply situation when they meet.

Oil fell Wednesday after U.S. government data showed another build of 8.2 million barrels, and U.S. production continued to creep higher to 9.1 million barrels a day.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam