The price of oil fell Monday to less than $39 a barrel, near its 2015 low set in August.
U.S. crude dropped to $38.97, just over a dollar more than the $37.75 it reached in August.
The dip came after the Organization of the Petroleum Exporting Countries (OPEC) failed to lower its production quotas at a policy meeting Friday.
Oil prices have been under intense pressure this year amid increased U.S. production and could face more turmoil once Western sanctions on Iran are lifted and open that country’s oil to sale. Given the already high levels of supply, member states will likely only drive the price of oil down further by keeping their production at current levels.
Barclays highlighted the “glaring” absence of a production target in OPEC’s post-meeting announcement: “Past communiques have at least included statements to adhere, strictly adhere, or maintain output in line with the production target.”
The oil cartel is apparently focused on bolstering its share of the market.
— Caroline Hyde (@CarolineHydeTV) December 7, 2015
As the Guardian points out, $40 a barrel is not enough for OPEC’s members to turn a profit and that “could have a nasty knock-on impact on their budgets.”
Shares of BP and Royal Dutch Shell were both down around 1% in Monday trading, despite most other components of London’s FTSE 100 seeing a boost.
But while OPEC’s decision may cause some heartburn for oil producers, it is likely to be greeted warmly by consumers who have gotten used to already low energy prices this year.