Crude oil prices collapsed after a report crossed that the 12-member oil cartel OPEC is not cutting its production levels.
According to Reuters, the group decided not to cut its production levels. Bloomberg reported, citing an OPEC delegate, that the group increased its production ceiling to 31.5 million barrels from 30 million barrels per day, excluding production from Indonesia.
OPEC is holding a policy meeting in Vienna on Friday.
In New York, West Texas Intermediate crude futures fell by as much as 2% and below $40 per barrel, to as low as $39.66. In August, WTI fell to a six-year low of $37.75.
There had been reports earlier this week about division among OPEC members about whether or not to cut output, amid a growing supply glut that is keeping oil prices lower..
Last year, OPEC, which is effectively led by Saudi Arabia, decided not to lower its production levels to maintain market share, as competition from other players like US shale-oil producers intensified.
And as production from OPEC and non-OPEC members soared, crude oil prices continued to fall.
Here's a chart showing the drop in WTI on Friday after the news crossed:
Investing.com