Oil prices slide to new lows

2nd October 2014, Comments 0 comments

Oil prices slumped to fresh lows on Thursday, pressured by a global supply glut and the strengthening dollar, analysts said.

Brent crude dropped to $91.55 a barrel -- the lowest point since June 28, 2012.

New York prices retreated to $88.18 -- touching a level last seen on April 23, 2013.

Brent crude for delivery in November later recovered to $92.17, which was however still down 2.0 percent, or by $1.99, compared with Wednesday's close.

US benchmark West Texas Intermediate for November was down $1.88 at $88.85 in early New York trading.

Sanjeev Gupta, analyst at business consultancy EY, said prices were hit by the "strengthening US dollar, which is at a four-year high against major currencies".

A strong US unit makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand.

Singapore's United Overseas Bank said dealers were digesting also "a clear manifestation of the over-supply environment" after Saudi Arabia on Wednesday lowered its official selling price for crude oil.

Media reports said the kingdom, a key member of the OPEC oil producing cartel, reduced its November prices, marking the fourth straight month of cuts.

The move indicated that the world's top crude producer is more focused on maintaining market share, and is unlikely to cut output anytime soon to ease a global supply glut.

Saudi Arabia has 16 percent of the world's proved oil reserves and produces 11.6 million barrels a day, according to official US government data.

Gupta said dealers will next scrutinise US jobs figures to be released Friday. "Sentiment for crude oil appears bearish in the short term," he said.

However the French research firm IFP EN said Thursday it expects prices to rebound to $100 to $105 per barrel next year due to geopolitical risks.

"An underlying trend of a return of Brent to 100 to 105 dollars remains conceivable," IFP EN director Olivier Appert told journalists in Paris, calling that a fair price for 2015.

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© 2014 AFP

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