Crude futures in free fall
Crude has plunged to a seven-year low and is now nearing the levels hit during the financial crisis with no end in sight to a persistent supply glut in the global markets.
West Texas Intermediate (WTI) and Brent crude futures tumbled more than one dollar respectively on Monday.
West Texas Intermediate, the US market benchmark, sank $1.09 to $34.53 a barrel, edging closer to the December 2008 low of $36.20 a barrel
Meanwhile, Brent crude, dropped $1.60 to $36.33 a barrel, its lowest level since in the past seven years.
Supply glut
The latest declines follow the Organization of the Petroleum Exporting Countries’ (OPEC) decision to continue pumping at current levels despite the oversupply on the global market.
The oil cartel, pumps 31.5 million barrels of crude per day.
Oil prices have plunged by about 60 percent in a year.
OPEC kingpin Saudi Arabia, the world's biggest oil exporter, has rejected other members’ calls for reducing crude output in a bid to adjust prices.
Riyadh has even increased production, offering discounts to buyers.
Saudi Authorities say the plan targets unconventional oil producers, including US shale drillers who have fed the glut.
They think the move will eventually force the unconventional producers out of the market by high production costs and low selling prices.
Saudi authorities have already expressed the hope that crude prices will adjust early next year with unconventional suppliers being squeezed out of the market.
However, some observers describe the plan as premature, saying output growth will still outweigh demand.
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