U.S. oil prices extended their declines overnight, falling to a fresh six-year low on oversupply concerns. Brent crude slipped 1.2% to US$53.30 a barrel, while West Texas Intermediate (WTI) crude fell 1% to US$43.46 a barrel.
In its recent monthly report, OPEC, or the Organisation of Petroleum Exporting Countries, indicated that it won't reduce its lofty production targets when it meets in June based on the assumption that low prices would begin to impact US production by the end of the year. Until then however, stored supplies of crude oil in the United States are sitting at their highest level in 80 years, according to the US Energy Information Administration (EIA).
As US oil producers continue to produce record levels of the resource, analysts are predicting the oil glut could get a whole lot worse before conditions get better. In fact, while some are saying that oil prices could test below US$40 a barrel, others are saying they could bottom out at US$20 before the end of the year. These forecasts are certainly weighing on the share prices of Australian energy producers, and that is no different today.
Senex Energy Ltd (ASX: SXY) and AWE Limited (ASX: AWE), for instance, are trading 4.8% and 3.7% lower respectively, while Origin Energy Ltd (ASX: ORG), Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) are down 1.2%, 0.6% and 1.1%. BHP Billiton Limited (ASX: BHP) has managed to buck the trend, likely due to its recent update regarding South32, with its shares trading 1% higher.