SINGAPORE: Brent crude slid under $60 a barrel on Wednesday, hovering close to its lowest in five years as a delivery surplus dragged down value.
Oil prices skidded in recent weeks, with Brent down nearly $20 since the Organization of the Petroleum Exporting Countries (OPEC) decided to keep output steady in late November. Non-OPEC member Russia, one of the world’s top producers, has also indicated that it does not plan to cut output despite a glut in the market.
Brent for February delivery was down 56 cents at $59.45 a barrel as of 0349 GMT. It touched a session low of $58.50 on Tuesday, the lowest since May 2009, and has plunged 50 per cent since June, when it was traded above $115.
US crude for January delivery dropped 97 cents to $54.96 a barrel after touching the lowest since May 2009 at $53.60 on Tuesday.
“The story is still the same. Europe is weak, China is weak, and the US economy is growing by a bit. It’s a supply story,” said Avtar Sandu, senior manager for commodities at Phillip Futures in Singapore.
“The only thing is that the markets are very oversold and oil is extremely cheap at these levels,” he added.
Core Gulf OPEC members that had declined to cut production at a November 27 meeting signalled this week they are prepared to wait as long as six months to a year to see the market stabilise.
Kuwait’s oil minister said on Tuesday that there were 1.8 million barrels a day of excess oil in the market currently and prices could pick up in the second half of 2015.
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