LONDON: Oil prices sank to fresh 5-1/2 year lows, extending losses after a 5% plunge in the previous session as worries over a global supply glut intensified.
Brent crude fell by 3% to below $52 per barrel as cuts to monthly oil selling prices for European buyers by top Organisation of the Petroleum Exporting Countries (Opec) producer Saudi Arabia heightened worries about oversupply.
Bjarne Schieldrop, chief commodity analyst with Seaboard Corporation (SEB) in Oslo said Saudi Arabia is showing no signs of pulling back. Stocks are continuing to build, and there is an increase in contango.
Some analysts said while Saudi Arabia increased its selling price to Asia, the cuts to Europe reflect the kingdom’s deepening defence of market share.
