Crude oil futures are hovering just below $45 per barrel and appear for a breakout lower with the forthcoming revelation. The whole breakdown of crude oil prices from OPEC members competing for global customers is about to accelerate with Iraqi oil production.
Oil production from Iraq is actually said to be climbing from a 35-year high as the southern oil fields remain untouched by ISIS militants, and adds a growing supply of oil from the Kurdish region (up north) to its exports. To match buyers with the added production will mean only one thing – offering more attractive incentives to buy than competing rivals of the OPEC nations.
“We have been led to believe the price war of crude oil has been between the US and Saudi Arabia, but now we are realizing perhaps the bigger explanation with an inter-OPEC rivalry,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental analysis insight regarding the current crude oil futures situation. Taylor added, “All OPEC members have defended their market share (by cutting prices), but with Iraq adding volume to inventory can lead to another leg down in crude oil futures.”
Crude oil futures trend is down with no clear bottom in sight. A decisive move below $45 per barrel can send crude oil futures to its next support level of $40.