Oil prices have dropped and continue to trade below $50 per barrel, as global crude markets continue to remain oversupplied although Middle East tension and declining US inventories restricted the fall.
Brent crude futures LCOc1 declined by 17 cents and traded at $49.95 per barrel, while US West Texas Intermediate (WTI) crude futures CLc1 also dropped by 17 cents to touch $48.02 a barrel, reported Reuters.
Traders opined that the oversupplied market has kept the prices below $50 mark despite the extension of agreement between Organization of the Petroleum Exporting Countries (OPEC) and other producers to reduce 1.8 million barrels per day (bpd) of output to March next year.
The US Energy Information Administration (EIA) reported that global fuel production and consumption is balanced at approximately 98 million bpd.
EIA also stated that US production can touch a record ten million bpd next year from the current output of 9.3 million.
Currently, oil prices gained support from growing tensions in the Middle East and signs of decline in US inventory.
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Investors are watching for the official data to be released by the EIA on US stocks.