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LONDON. — Brent crude oil fell almost $2 a barrel yesterday to a new five-year low on predictions that oversupply would keep building until next year after Organisation of Petroleum Exporting Countries (Opec) decided not to cut output.
“Without Opec intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015,” Morgan Stanley analyst Adam Longson said.
In a report dated December 5, the US investment bank said oil prices could fall as low as $43 a barrel next year. The bank cut its average 2015 Brent base case outlook by $28 to $70 a barrel, and by $14 to $88 a barrel for 2016.
Brent crude for January was down $1,45 at $67,62 a barrel by 10am GMT, having fallen $1,72 to $67,35 — its lowest since October 2009.
US crude was down $1,16 at $64,68 a barrel, after hitting a session low of $64,63. The US contract, also known as West Texas Intermediate, touched $63,72 last week, its lowest since July 2009.
At a meeting last month, top oil exporter Saudi Arabia resisted calls from poorer members of Opec to reduce production, fuelling a further slide in prices, which have lost more than 40 percent since June.
“Brent is moving into the $60 to $70 trading range,” said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland.
“There is nothing really providing strong support for crude oil right now,” he added.
Mixed Chinese trade data further unsettled prices.
China’s imports shrank unexpectedly in November, falling 6,7 percent, while export growth slowed, fuelling concerns the world’s second-largest economy could be facing a sharp slowdown.
China’s crude oil imports rose 9 percent in November from October to 6,18 million barrels a day, suggesting the country may be boosting its reserves.
“If one looks at the overall economic indicators, they are all showing a picture of China which is stagnating rather than having strong growth,” said Mr Jakob. —Reuters.
Online Reporter