No end in sight for falling oil prices

Today, U.S. crude has dropped by 3% causing prices to tumble by almost $27. It is particular remarkable as oil had not fallen below the price of $27 since 2003. The decline oil prices have resulted in major losses in the markets for various energy companies and the threat of looming bankruptcies have worried investors. Since June of 2014, crude oil has dropped by 75%, when it had hit its peak. Further abroad, major indexes including: The Hang Seng (HSI) and Nikkei (N225) have each dropped by 4% and 2.3% respectively, while indexes on the European front and the U.S have also tumbled by 2% in the last few months. 

According to The International Energy Agency (IEA) in its monthly report it admits that expecting oil prices to rise significantly within the next few months is unrealistic. Meanwhile Iran has done significantly good in the market, thanks to lifted international sanctions on the country. It has stepped up oil production to 3 million barrels a day since the lifting of sanctions. Iraq has also seen a significant output in oil production amid civil war.

However the low oil prices have not resulted in boosted oil demands on the market and the IEA has predicted that a demand for oil will slow down amid global economic hardship.. Chairman of the Federal Reserve, Janet Yellen  said this week that although the global economy might not be in its best state, the U.S central bank plans progressively raise interest rates. Meanwhile Japan's central bank has introduced negative interest rates in order to stimulate growth. China has spent billions in order to strengthen the weakening Yuan and Europe's central bank is also planning an increase in its stimulus package.