By BUSINESS REPORTER –
THE prices of oil on the international market have continued to fall, dropping to fresh five -year lows yesterday as worries about a surplus of global supplies and low demand dampen the markets.
REUTERS reports that Russia’s oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day up by 0.7 per cent thanks to small non-state producers.
Iraq’s oil exports were at their highest since 1980 in December, an oil ministry spokesman said, with record sales from the country’s southern terminals.
But oil producer group OPEC has decided not to cut output, opting to let the market find its own level.
The two oil benchmarks – Brent and West Texas Intermediate – have now lost more than half of their value since mid-2014. Brent crude for February dropped as low as $55.25 a barrel, its weakest since May 2009, before edging back to $55.67, down by 75 cents.
US crude slid to $51.40 a barrel, also its lowest since May 2009, before recovering a little to trade around $51.90.
Lackluster economic data from the United States on Friday fueled worries about the state of the global economy and the strength of oil demand.
A weak euro may also have contributed to further oil losses as it reduces the purchasing power of euro holders for dollar-denominated oil.
Investors are also increasing bets on lower oil prices.
Open interest for $40-$50 strike puts have risen several fold since the start of December, while $20-$30 puts for June 2015 have traded, said Stephen Schork, editor of Pennsylvania-based The Schork Report.
Elsewhere, the price for London copper fell for a third consecutive session to trade near its four-and-a-half year low.
The price for three-month copper on the London Metal Exchange was down by 0.4 per cent, or $25, at $6,230 a tonne.
The metal hit $6,218 on Friday; it’s lowest since June 2010.
The most-traded copper contract on the Shanghai Futures Exchange closed down by 1.2 per cent at 45,080 yuan a tonne.