Crude oil falls to lowest price in five years
Crude oil prices have fallen below $50 per barrel for the first time since 2009, hit by OPEC’s production stance, oversupply, weak demand and the strong dollar.
European Brent oil dived to $49.81 a barrel on Wednesday, a 5-year-low. New York crude had already slumped under $50 on Monday.
Oil has dropped about 50 percent since June on worries about weak demand and a decision by the Organisation of the Petroleum Exporting countries (OPEC) not to cut output in response to lower prices.
“The move below $50 shows how momentum is everything here,” Michael Hewson, CMC Markets analyst told the AFP news agency.
“With no sign that OPEC will do anything about over-production, it seems likely that we could well see further declines towards $40 in the coming weeks – particularly given that demand shows no signs of picking up.
“Weak growth and weak demand in China and Europe are likely to continue to be the main drivers as the battle for market share intensifies. We’ll probably still see sharp swings in the interim but the direction of travel seems clear, unless OPEC acts.”
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