Oil prices plummeted to its lowest in five months after data showed the U.S. rising oil production would offset efforts by the OPEC to moderate prices.

The global oil prices which started falling on Monday following a report that hedge funds and money managers have started cutting bullish positions, dip lower on Thursday to reach its pre-OPEC consensus level.

Since Monday, the WTI has dropped about 9 percent to $45.60, its lowest since November 2016. While the Brent Crude has plunged as much as 8 percent to trade at $48.83, the lowest price level this year.

Experts have said the uncertainty surrounding OPEC policy and the continuous rise of the U.S. oil production will continue to weigh on global oil outlook in the medium term.

“With the future of OPEC policy unclear, the trend of rising U.S. production remains the single biggest headwind for oil prices in the medium term,” said Tyler Richey, co-editor of the Sevens Report.

However, analysts have said OPEC would have to cut more than the 1.8 million barrels a day it cut in November to curtail global glut and normalize prices.

“An extension would be mildly supportive of oil, but because of the recent rise in U.S. production, the effect of OPEC policy on global inventories has been limited and deeper cuts to member production are likely needed to really ignite a rally through the mid $50/barrel level,” said Richey.

Brent crude oil has now erased all its gains since OPEC reached accord on November 30, 2016.

Also, currencies of commodity-dependent economies like the Canadian dollar, Aussie, etc. plunged against the U.S. dollar this week, reaching their lowest exchange rate this year.

According to Samed Olukoya, a foreign exchange research analyst at Investors King Ltd., “The issue is not just the rising U.S. oil production, but also the surge in production level of OPEC members exempted from production cut in November. For instance, Libya has announced that the El-Feel oilfield is ready to resume production after two years, this is an oil field that has a production capacity of 80,000 barrels per day. Likewise, Nigeria is struggling to up its output from about 1.5 million barrels per day to 2 million barrels per day. All these add up to what trigger the sell-off and are expected to further hurt investment in the oil sector if not checked.”

Investorsking