OPEC Discusses Output Increase

International oil prices have plunged.

Western Texas Intermediate (WTI) crude oil prices closed on Wednesday (local time) at $39.87 a barrel, down $2.49 from the record highs of Tuesday, according to the Korea Natural Oil Corporation (KNOC). It was the largest decline ever since March 18, 2003 when the prices sank by $3.26.

WTI crude futures closed below $40 a barrel on the day. The WTI oil price for July delivery settled at $39.96, down $2.37 on the New York Mercantile Exchange.

Brent spot and futures prices fell $0.51, $2.22 to $38.21 and $36.86 respectively.

Dubai crude was not traded because the Singapore’s market was closed for holidays.

The oil prices tumbled due to massive profit-taking on the expectations that U.S. oil inventories would go up and the Organization of Petroleum Exporting Countries (OPEC) was sure to raise output.

“A possible output increase from OPEC was reflected in the oil prices as investors focused more on supply and demand than on security concerns about terror attacks,” said the KNOC.

OPEC discussed on Thursday on how much it would raise its output quotas at a meeting in Beirut on Thursday. The details of the final agreement will be announced on Thursday evening (Korea time).

Ki-Jeong Ko koh@donga.com