Supply Drives Oil to Five Year Low

Oil prices dropped to fresh 5-1/2-year lows on Monday on worries about a surplus of global supplies and lackluster demand.

Russia’s oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day (bpd), up 0.7 percent thanks to small non-state producers, Energy Ministry data showed.

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 crude oil benchmarks – Brent and U.S. light crude, also known as West Texas Intermediate – have now lost more than half of their value since mid-2014.

Brent crude LCOc1 for February dropped as low as $54.85 a barrel, its weakest since May 2009, before edging back to $54.90, down $1.52, by 1155 GMT (0655 ET). U.S. crude CLc1 slid to $51.36 a barrel on Monday, also its lowest since May 2009.

via Reuters

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