Oil prices have turned for yet another slump following the gains extracted over last week as a result of speculations regarding the member countries of OPEC (Organization of the Petroleum Exporting Countries) and Russia agreeing on a deal concerning the cutting down in oil output into the already oversupplied markets. However, traders are now turning skeptical regarding any such deal to take place in the near future.

Weak economic data from Chinese markets has also resulted in this plunge in oil prices. It is to be noted that manufacturing data in China has contracted in January at its highest pace in more than 3 years.

Output worries result in cutting down of oil prices

US benchmark of West Texas Intermediate slated for delivery in March dropped by 1.99 percent or 63 cents to settle at $30.99 per barrel in early Asian trade today. On the other hand, Brent Crude slated for April delivery plunged by 1.87 percent or 64 cents to settle at $33.60 per barrel.

Globally, oil has lost a total of 70 percent of its usual value since the month of June 2014. This is due to the piling up of supplies as well as the drop in demand in Chinese manufacturing companies due to slower than ever economic growth. According to reports, the Purchasing Managers Index in China, which is responsible for tracking the activities of workshops and factories, has fallen to 49.4. This is the lowest fall observed for this index since August 2012 when it plunged to 49.2 respectively.

While in the United States, the crude oil stocks have reached their record high due to the US inventories continuing to build on their petroleum and crude oil supplies over the last month, traders and market analysts are doubtful on whether any such coordination agreement will be signed between the concerned producers of oil into a market which is already oversupplied to the brim.