(Neo Web Desk): On Thursday, the price of West Texas Intermediate crude oil fell below $42 a barrel for the first time in over 6 years.
And as markets face the reality that there is simply too much oil and not enough demand to sop it up, prices aren’t going anywhere.
In a note to clients on Friday morning, Societe Generale strategist Kit Juckes wrote that, “The eye-catchingly weak commodity [on Thursday] was oil, again.”
Juckes added, “It’s now clear to financial markets that tackling oversupply in a world with more modest demand growth, requires a more protracted undershoot in oil prices. The same could be said of the whole commodity complex.”
Early Friday morning, WTI prices were off their overnight lows to trade at around $42.25 a barrel.
Earlier this week, the oil market was hit with 2 more pieces of bad news: OPEC — the 12-member oil cartel ostensibly led by Saudi Arabia — reported that oil output hit a 3-year high in July, while the International Energy Agency issued a report saying the market would remain oversupplied through 2016.