Oil price hits 4-month low

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Crude oil prices on Monday hit a four-month low.

The price slumped by four percent to US $39.86 for Brent oil, its lowest price since April.

The current Trinidad and Tobago budget are based on an oil price of US $45 a barrel.

International oil experts are predicting that the price would bottom out in the high US $30s.

Oil prices have declined by 22 percent since June.

The experts are pointing to a glut on the market and to plans by United States companies to explore for more oil.

Stockpiles are high, the analysts are saying.

In addition, Saudi Arabia, the largest OPEC producer, has cut its prices for the Asian market.

The lowest oil price in recent times was US $26 in mid-February.

British Petroleum, the largest energy player in the T&T market, has been hard hit by the low prices but recently revealed it was committed to a project in this country.

In setting the national budget at US $5 a barrel, Finance Minister Colm Imbert had described it as “fairly conservative even by international experts.”

The on-going depressed prices could negatively impact Imbert’s 2016-17 budget, due to be presented within two months.

In his mid-year financial review in April, the minister said: “With oil prices at unprecedented low levels, exploration budgets have been trimmed and there have been layoffs in the energy sector.

“Some of the smaller operators are now on the brink of going under, which has had spill-over effects throughout the economy.”

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