NEW YORK: Oil prices plumbed to five-and-a-half-year lows yesterday after Opec said it would not cut oil output despite fears of a glut, and a UAE official opposed holding an emergency meeting of the producer group to fix prices.
US benchmark West Texas Intermediate for January delivery lost $1.90, closing on the New York Mercantile Exchange at $55.91, its lowest level since early May 2009.
The European benchmark, Brent North Sea crude for January delivery, settled at $61.06 a barrel in London, down 79 cents from Friday’s closing level.
Oil prices have plunged roughly 50 percent since June, weighed down by plentiful supplies, the stronger dollar and weak demand arising from the struggling global economy, according to analysts.
“You have all these Opec officials reiterating they are not going to cut production, so you are seeing selling into the rallies,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Abdullah Al Badri, Secretary-General of the Organisation of the Petroleum Exporting Countries, said the group could ride out an oil price slump since June of nearly 50 percent without amending production.
Influenced by top exporter Saudi Arabia, Opec decided last month that cutting output meant losing its market share. On Sunday, Al Badri hinted that speculation was behind the steep price declines.
Suhail bin Mohammed Al Mazroui, oil minister of the UAE, later said there was no need for an emergency Opec meeting to help support prices.
Venezuela and Algeria, which need higher oil prices for their economies, were among Opec members that had hinted at an emergency meeting after last month’s Vienna summit that did not agree on output cuts. Opec’s next meeting is in June 2015.
Oil was up initially early yesterday on news that Libya’s two biggest oil ports had shut due to fighting between armed factions allied to the country’s two rival governments. Agencies
