LONDON: World oil prices resumed their downward spiral, as dealers eyed the poor global economic outlook, after rallying in the previous session on bargain buying.
Crude futures also sank as traders digested news that US stockpiles had risen, adding to long running concerns about a supply glut and weak demand.
Brent North Sea crude for February delivery slid $1.18 to $47.51 per barrel. US benchmark West Texas Intermediate for delivery in February dropped 69 cents at $47.79 a barrel.
Brent futures continue to trade under pressure despite a modest rally towards $49, as the deteriorating situation in the euro zone and impending Greek elections crimp investment demand from the region.
Greece faces a January 25 snap election that its government has described as critical to the country’s future in the euro zone. Crude futures enjoyed a rare rally, gaining five percent after plunging close to six year lows.
Losses accelerated in November after the Organisation of Petroleum Exporting Countries (OPEC) voted to maintain production levels, despite demands from some members to cut output and halt sliding prices.
OPEC said that it expected the current excess of crude supply responsible for plummeting oil prices to continue through 2015, despite a moderate increase in global demand.
OPEC said oil prices will continue dropping this year, as bearish sentiment in the oil market persists as it faces an increasing overhang of at least one million barrels per day.
The 12 nation cartel says the slight rise in 2015 demand will come largely from reviving economic activity in North America and Asian countries other than China and Japan. OPEC expects next year’s jump in demand will be satisfied by production increases planned by non cartel countries.
