Oil prices occupied an almost two-month low on Monday, July 25, due to concerns that a glut in worldwide crude and refined oil would trouble the market for a long time to come.
International Brent crude futures were selling at $45.59 (£34.74) abarrel early in the day, down 10¢ from the markets last close, whilst U.S. West Texas Intermediate oil was trading at $44.09 (£33.60), again down 10¢ per barrel on the previous close of trading.
Both of the benchmarks were very near to two-month lows, which had been reached in the previous week, with traders noting that continuing oil oversupply and increasing economic headwinds were weighing heavily on the oil market.
In a note addressed to its clients, U.S. bank Morgan Stanley draw attention to the situation and offered some explanations. The bank’s note points to a number of factors, including the robust U.S. supply, a fall in demand for transport oils, and over-availability among refiners, especially in gasoline, for the tumbling oil prices. It noted, too, that increasing economic risks are also a factor in poor oil prices.
Not only that, but the strong dollar and another weekly rise – the fourth in a row – in the United States oil rig count also put a strain on prices, according to traders. The turbulence in the oil market is likely to cause concern for some of the biggest names in oil, including ExxonMobil, with its Mobil Delvac Super 1400 15W/40 being one of the biggest oil-based products on the market.