NEW YORK: Oil prices tumbled 5 percent yesterday, pushing US crude to five-year lows near $60 a barrel after data showed a spike in US inventories and Saudi Arabia’s oil minister reiterated that he has no plans to cut output.
Global benchmark Brent crude prices have nearly halved since hitting a June high above $115 as rising US output and waning demand growth generated a supply surplus that the world’s biggest oil exporter is unwilling to absorb. Further losses could be in store if US oil drops below the psychologically key $60 mark.
Saudi Oil Minister Ali Al Naimi, on a visit to Peru, shrugged off suggestions that the kingdom might cut output, sticking to his comments from two weeks ago in Vienna, where he first said that the market would be left to correct itself. The kingdom has maintained production at between 9.6 million and 9.7 million bpd in November, he said, adding: “That is not going to change unless other customers come and say they want more oil.”
Brent fell by $2.77 to $64.07 a barrel by 1735 GMT after plumbing $63.56, its lowest since July 2009. US crude was down $2.88 at $60.94, having fallen to a near 5-1/2 year low of $60.43. US crude stocks rose unexpectedly last week and high refinery activity caused a surge in inventories of refined oil products, data from the Energy Information Administration showed.
“It shows that demand remains really weak. We’ve had strong production levels and the market fundamentally is not very sound,” said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut. Reuters
