Oil prices fell further Wednesday, with the international benchmark for crude sliding below $45 a barrel.
The recent drop in price indicates that efforts by OPEC and 10 other oil-producing countries to cut their production to reduce a supply glut and push prices higher are falling short.
While Russia, Saudi Arabia and other nations involved in the deal have met their targeted cuts, an unforeseen increase in U.S. supply has countered these efforts. With the glut persisting, the outlook for oil prices has been dampened.
“As we see it, it is not the events that are putting pressure on prices, but above all the shift in sentiment, the previous optimism appearing to have virtually evaporated,” analysts at Commerzbank wrote in a note to clients. They predict persistent negative sentiment could push the international benchmark, Brent, below $45 per barrel.
Brent was down $1.20, or 2.6 percent, at $44.82 a barrel. The U.S. benchmark dropped 98 cents, or 2.3 percent, to $42.53 a barrel in New York.
Weak prices mean that, all other things being equal, consumers can expect cheaper energy and car fuel.
The U.S. Energy Information Administration’s weekly petroleum data for the week ended June 16 showed a 2.5 million decrease in American crude oil supplies from the previous week.