Brent crude oil slipped on Friday 12th December, 2014 to $63 a barrel, its lowest since July 2009, dragged down by persistent concerns over a global supply glut and a sluggish demand outlook.
Brentwais down 8% this week, 45% below its June peak above $115 per barrel.
The Organisation of the Petroleum Exporting Countries (Opec), which accounts for a third of global oil output, cut its 2015 demand forecast this week to the lowest in more than a decade.
“It’s following the trend lower. The market has reacted strongly to the Opec forecast cut, and it is focusing only on the negative,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
He added that there was little technical support until the $50-55 level.
Brent was down 52 cents at $63.16 a barrel by 10:21, after touching $63.00.
Investors were awaiting a monthly oil market report from the International Energy Agency at 11:00 for more clues about the demand outlook.
US crude was down 75 cents at $59.20 a barrel, after falling more than a dollar to a low of $58.80, also the weakest since July 2009. The contract has lost about 10% this week.
Top energy consumer China released data showing near-record refinery runs in November, with factory output growth weaker than expected.
High Chinese oil demand, which has remained above 10 million barrels per day for the past three months, could help provide a floor for prices.
Remarks by Saudi Arabia’s oil minister reiterating that the kingdom will not cut output, and a surprise jump in US crude and distillate inventories, have driven down oil prices this week.
Opec exporters are locked in a battle for market share. Kuwait has set the official selling price for crude sales to Asian buyers for January at $3.95 a barrel below the average of Oman/Dubai quotes, a trader said, its lowest since December 2008.
The market outlook is uncertain, with some traders speculating that other Opec members, such as Algeria and Venezuela, may convince the group to hold an emergency meeting early next year. Others doubt that Saudi Arabia would agree to production cuts even if such a meeting were held.
“We continue to believe that the reversal for an uptrend is not in sight,” Daniel Ang of Phillip Futures said in a note.