At around 02:20 GMT, West Texas Intermediate (WTI) for January delivery was trading at $34.77 per barrel, 18 cents off its close of $34.95 in New York.European benchmark Brent crude for February was down nine cents to $36.97.
Oil is trading near levels last seen at the height of the last global financial crisis as producers including the OPEC group continue pumping despite depressed prices and anaemic global demand.
Adding to the commodity’s woes is the US Federal Reserve’s decision on Wednesday to raise benchmark interest rates for the first time in nine years, boosting the dollar and thus making crude more expensive for buyers with weaker currencies.
“WTI sinking further below $35 in the morning is likely the result of the strengthening dollar,” Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.
“In addition to this, Brent’s January 2016 contract has expired, which is causing spread traders to close off their WTI January 2016 contract positions.”
Gene McGillian, broker and analyst at Tradition Energy, said oil prices will probably test the lows of 2008, which would bring WTI to the vicinity of $32 a barrel.
“Until we see signs that production is basically beginning to come down somewhere in the world… that the economic activity is going to pick up and boost fuel demand, the market is going to remain at these low levels and grind towards those areas we bottomed at during the Great Recession,” McGillian said.
Meanwhile analysts have impressed on government to be prudent in its expenditure in order to benefit from the global declining crude oil prices. Some industry watchers are predicting that Finance Minister Seth Terkper may be forced to revise its targets of oil revenues next year if the development persists.
Economist, Dr. Samuel Nii-Noi Ashong tells Citi Business News, rationalizing expenditure will reduce the impact on Ghana, which is a net importer of oil.