Bump in oil prices as new OPEC cuts hurt producers

The latest oil price decline to its lowest in two years is the latest sign that a slowdown in global demand will continue in the coming months as the Organization of the Petroleum Exporting Countries seeks to cut output in an effort to prop up prices.

The oil market plunged to $48.84 per barrel in the third quarter from $50.25 on Monday, a year ago.

In the past two weeks, the price of Brent crude has dropped $5 to $49.92 a barrel, the cheapest it’s been in five years, and prices for Brent crude have dropped more than $5 per barrel since January, according to data compiled by Bloomberg.

Oil prices fell to $52.20 in mid-June. 

U.S. crude, which rose to $45.84 a barrel on Tuesday, is down more than 50 cents from $49 per barrel earlier in the week.

Brent crude, the international benchmark, fell $5.28 to $44.75 a barrel. 

The oil market has slumped as production and exports have slowed amid the global economic slowdown, causing prices to decline.

Saudi Arabia has announced a plan to cut its oil output by 80 percent by 2020 and by 75 percent by 2030, and Saudi Aramco has said it will halt production at its Saudi state oil company.

Saudi Aramco, which operates as the world’s biggest crude producer, will cut production by 80 to 80 percent in 2020 and 75 to 75 percent in 2030, Saudi Arabia’s state oil firm, Aramco SA, said in a statement Tuesday.

The cut would reduce output by about 7 billion barrels per day by 2030.

The move is expected to reduce crude exports by nearly 1 billion barrels, according the Saudi-owned Oil Minister, Mohammad al-Mouallimi.

The OPEC meeting ended Tuesday, but no deal was reached.