NEW YORK: Brent crude LCOc1 reversed early gains Friday to fall to fresh post 2009 low below $56 (36 pounds) a barrel, as a glut of oil that has halved prices since June overshadowed investor positioning at the start of the year for a possible eventual recovery.
Brent has slumped to its lowest in more than five years as top exporter Saudi Arabia and other large Gulf producers continue to pump oil amid fast growing US shale oil output, despite pleas from other Organisation of the Petroleum Exporting Countries members to rein in production and shore up prices.
Iran’s deputy foreign minister urged its regional rival Saudi Arabia to take action to support oil prices, saying producer countries across the Middle East will be hurt unless the slump is reversed. But Saudi Arabia has indicated it is prepared to ride out lower prices so it can retain market share.
RBN Energy analyst Rusty Braziel said in a note with no production cuts in the offing and significant demand response years away, oversupply looks to be with us for a while. $100 a barrel crude oil prices are in the rear view mirror, at least for a couple of years.
Brent crude LCOc1 for February delivery was down $1.21 at $56.12 per barrel, almost 5 percent below the day’s high at $58.54. Prices touched a post 2009 low of $55.48, having averaged around $110 a barrel between 2011 and 2013.
