Desmoines News Desk

Oil prices fall 46% in 2014, worst since 2008

Oil prices fall 46% in 2014, worst since 2008

Oil prices fell Wednesday and ended the year with the worst annual price drop since 2008, reflecting the global supply glut caused by slowing demand from China and the booming U.S. shale production. U.S. crude (West Texas Intermediate) settled down 85 cents to $53.27 Wednesday. It dropped 46% for the year.AFP 536375601 I FIN FRA BO

Brent was down 57 cents Wednesday to $57.33. It fell 48% for the year. In the past, the Organization of the Petroleum Exporting Countries (OPEC) has cut oil output to keep price afloat in times of supply abundance. But the group, comprised of 12 oil producing nations, has been reluctant to lower supply this year, fearing that its market share will be eroded by heightened competition from U.S. suppliers.

While a Reuters survey Tuesday showed that OPEC nations’ output fell by 270,000 barrels per day in November and December, it still predicts “a large excess supply next year.” “The main reason for oil’s decline is OPEC sitting on the fence,” Giovanni Staunovo, an analyst at UBS AG in Zurich, told Bloomberg News. “To prevent an excessive inventory build-up, non-OPEC supply growth, particularly U.S. tight oil, needs to decelerate or stall temporarily.”

Inventories at Cushing, Oklahoma, the delivery point for WTI futures, increased by 2 million barrels to 30.8 million, according to Bloomberg News. That’s the highest stockpile level since February.