Oil extended losses below $48 a barrel amid speculation that US inventories will expand, deepening a global supply glut that’s driven prices to a five-year low.
Futures declined for a fourth day. Stockpiles in the world’s biggest oil-consuming country probably rose by 700,000 barrels last week, a survey showed before a government report.
Oil slumped almost 50% in 2014, the most since the 2008 financial crisis, after the Organization of Petroleum Exporting Countries resisted calls to cut output as it competes with US producers.
Oil prices have tumbled to their lowest level in nearly six years as a glut in supply coincides with shrinking demand amid fears for world economic growth.
The plunge looks set to prove a boon for consumers as it feeds through to lower petrol costs and depressed inflation - currently at a 12-year low of 1% and expected to fall further - but hurts the prospects of UK-listed companies.
Brent crude today headed close to $51 a barrel, nearing the $50 that has not been seen since May 2009.
The oil market is set for “more problems” this year as increasing supplies from countries including Russia and Iraq add to the global glut that drove prices almost 50% lower in 2014, according to Morgan Stanley.
Output may increase from fields in West Africa, Latin America, the US and Canada in addition to more exports from Russia and Iraq, offsetting concerns of reduced production in Libya, analysts including New York-based Adam Longson sai.
Iran may raise overseas shipments by about 500,000 barrels a day if western sanctions against the country are lifted, according to the report.
From tomorrow, Asda and Morrisons are reducing their petrol and diesel by 2p a litre.
It means Asda customers will pay no more than 105.7p a litre for petrol, with diesel being 112.7p a litre.
This is Asda’s 14th fuel cut since the end of September, with 21p a litre coming off its petrol price in total and 17p a litre off its diesel.
Oil prices have crashed and the North Sea is hurting badly, with the likelihood that this is going to be a prolonged downturn . . . at least for the bulk of this new year, if not longer.
Capital investment in the North Sea could halve by 2017 unless there is urgent reform of the tax regime in light of a big drop in the price of crude oil, according to Oil & Gas UK, which is hoping for good things from the Treasury before the May election following promises made early last month.
And Wood Mackenzie has estimated that 32 potential European oil field developments worth more than $85billion (£55billion) are waiting for approval and could be at risk if oil prices continue to slump. A high proportion of those projects have a break-even price higher than $60 per barrel and many are in the UK sector.
A weakening oil price meant BP and Royal Dutch Shell remained under pressure despite a steady start to the year for the FTSE 100 Index.
BP shares topped the fallers board with a decline of 1.5% as the price of Brent crude slipped to $56 a barrel due to ongoing fears of a supply glut.
The four major supermarkets have provided some New Year cheer for motorists by cutting their fuel prices.
Asda, Morrisons, Sainsb ury’s and Tesco are all knocking 2p a litre off their petrol and diesel, with the reductions taking effect from tomorrow.
The Asda cuts will mean its customers will pay no more than 107.7p a litre for petrol, with diesel at 114.7p a litre.
Brent and US crude oil prices both hit five year lows yesterday, before rebounding slightly, and experts expect them to go lower still.
Benchmark Brent was down by 36 cents a barrel to $57.52, putting it on track for its second weakest month since the global financial crisis of 2008, while US crude was off 3 cents at $53.57 by late afternoon UK-time.
Richard Hastings, a macro strategist at American investment bank Global Hunter Securities said US crude would likely break below $50 in the next few trading days.
The London market’s festive rally came to an abrupt halt today amid lower oil prices and fresh uncertainty over Greece’s future in the euro.
With the FTSE 100 Index 57.6 points lower at 6575.9, the top flight is on course to complete its first negative session since December 15.
Commodity firms dominated the fallers board after the price of Brent crude oil dived to a five-and-a-half year low of near to 57 US dollars a barrel.
Commodity-based stocks were lower - causing the top flight index to slump by 38.6 points to 6595 - after the price of Brent crude oil dived to a five-and-a-half year low of near to 57 US dollars a barrel.
The latest fall in the price of oil was accompanied by fears over the eurozone outlook after Greece was forced to announce early national elections due to the failure of the country’s politicians to elect a new president.
Oil’s slump has almost doubled the value of India’s big, state-owned refiners, outpacing the rest of the industry from China to the US.
The companies had been forced to make a large proportion of sales at below cost for over a decade.
Now, they can profit from fuels after India’s new government saw its opportunity in falling oil prices to deregulate the market without bothering its inflation targets. OPEC’s decision to sit on its hands in the face of an oil glut has only accelerated share gains.
The London market picked up where it left off before Christmas as strong trading among mining stocks helped the FTSE 100 Index to more gains.
A strong session for Asian markets overnight and a modest recovery in the price of Brent crude oil to about 60 US dollars a barrel ensured the likes of BHP Billiton, Rio Tinto and BP were in positive territory.
Amid thin trading volumes, the FTSE 100 Index was higher for an eighth session in a row - up by 14.5 points at 6624.4.
Having reached 2014 highs in June, crude oil prices started to free fall and in the search for reasons some people have pointed towards the International Energy Agency's (IEA) changing demand and supply expectations.
Since June, when its 2014 global oil demand growth forecast hit a peak of 1.4million barrels per day (bpd), IEA’s projections have fallen by half.
By contrast, supply expectations have been much more stable – since June, the IEA's forecasts of non-Opec (Organisation of the Petroleum Exporting Countries) oil supply growth have expanded by a modest 300,000bpd and the IEA's non-Opec supply forecast is currently only 100,000bpd above the level at which it started 2014.
Oil traders are poised to cash in on low crude prices by storing vast quantities of the commodity until prices rise.
Global demand for supertankers is already growing as companies look to take advantage of the weakest oil prices in years.
The price of a barrel of Brent crude has plunged nearly 50% since June due to a global supply glut but the economics for storing crude at sea have until just recently remained unfavourable.
The boss of Danish conglomerate A.P. Moller-Maersk has warned the group’s oil division will have to close some sites and cut operating costs if oil prices remain at their current level.
Nils Smedegaard Andersen, chief executive, said that if prices stay around $60 per barrel, it will reduce revenue in the oil unit by one-third from the level of 2013.
He added: “As all costs, except taxes, are fixed it is obviously something we have to take very seriously. And we would have to do some things.”
A summit which aims to bring together governments, trade unions and industry bodies to save jobs in Scotland’s oil capital has been announced.
Jenny Laing, leader of Aberdeen City Council, has called on the Scottish and UK Governments to attend the summit on the North Sea oil industry which is struggling under plummeting oil prices.
Labour has pledged to send its leader Jim Murphy and has urged First Minister Nicola Sturgeon and Prime Minister David Cameron to attend.
The FTSE 100 Index completed its best week in three years today - just a week after its worst in three years.
London’s top-flight was up 3.9% after recent market jitters were assuaged by indications from the US Federal Reserve that while the world’s largest economy is improving there will be no hurry to raise interest rates.
The FTSE 100 has enjoyed its biggest weekly climb since December 2011, adding £62 billion to the value of its constituent companies.
Investors betting on a rebound in oil prices are nothing if not tenacious.
They have poured the most money in more than four years into exchange-traded products that track oil as prices fell 18% this month.
It’s the third consecutive month that the four biggest US funds have received money, during which time futures have plunged 41%.
Oil and gas expert Alex Kemp said he did not agree with comments made which claimed the North Sea was “close to collapse”.
Robin Allan, chairman of the independent explorers association Brindex, said it is “almost impossible to make money” with the oil price below $60 a barrel.
However Mr Kemp said the current investment in new fields had been predicted to lessen when oil prices were at $90 a barrel.
North Sea “close to collapse” says the man from Brindex. I am of course referring to remarks made to the BBC by its chairman Robin Allan, who then goes on to say that the UK’s offshore industry has been in such territory before.
The 1986 oil price crash was a shocking event and did terrible damage at the time. However, it also marked the start of a turning point as the North Sea gradually started to mature. Various initiatives in the 1990s designed to tackle key issues like rocketing costs helped and they were timely given the next slump that started with a gradual oil price slide in 1997, bottoming out in late 1998 at less than $10 a barrel for a few days.
The UK’s oil industry is “close to collapse” but the falling oil price could have a net benefit to the UK economy, according to experts.
Robin Allan, chairman of the independent explorers’ association Brindex, said it is “almost impossible to make money” with the oil price below 60 US dollars (£38) a barrel and there will be no new investments.
But accountants PricewaterhouseCoopers (PwC) said the falling oil price “should be a net benefit to our economy as a whole, even if there is some losers in the UK oil and gas sector and in particular places like Aberdeen”.
The FTSE 100 Index held on to strong gains in the previous session today as a bullish start for Wall Street and an oil price bounce helped blue-chip shares recover from earlier turbulence.
A volatile session on Tuesday hit by jitters over the price of oil and the slide in value of the Russian rouble had seen the index close 2.5% ahead.
The latest session saw it earlier fall by nearly 100 points but recover to close 4.6 points up at 6336.5. Oil climbed back above the 60 US dollars mark for a barrel of Brent crude.
Volatility for world markets continued today as the FTSE 100 Index put back a large chunk of the 2.5% rise seen in its previous session.
Oil prices steadied at 60 US dollars for a barrel of Brent crude but this was not enough to prevent another weak session in Europe as confidence was hit by the continued financial crisis in Russia.
The FTSE 100 Index stood 45 points lower at 6287.1, having rebounded by 2.5% or 149 points at the end of choppy trading yesterday.
The “big four” supermarkets are all cutting their fuel prices.
With world oil prices plunging, Asda, Sainsbury’s, Morrisons and Tesco are all reducing their petrol by 2p a litre and their diesel by 1p a litre from tomorrow.
The Asda cut means its customers will pay no more than 110.7p a litre for petrol, with the company’s diesel costing 117.7p a litre.
Nigeria’s two oil unions are set to meet with government officials for talks today as an indefinite strike aimed at curbing local fuel supply and exports entered a third day in Africa’s biggest crude producer.
The impact of the strike has been restricted to domestic fuel supply with oil lifting and export terminal operations unaffected at the moment, Francis Johnson, president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, or Pengassan, said from Lagos, the commercial capital.
Union leaders will hold talks with the authorities today in Abuja, the capital, he said.
