Oil prices still going down

Market news
Market news

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.

He added: “It’s an unstable situation once again. We’ve broken through some of the levels that we saw that started to firm up over the last week or so.”

Brian LaRose, a technical analyst with United-ICAP, a US service focused on identifying the likely direction, extent and duration of price trends in crude oil, petroleum products and natural gas, said a “significant catalyst” was needed to prompt buying, adding: “Until we see some sort of technical evidence developing, then one has to be sceptical of picking a (price) bottom.”

Oil markets have been heavily oversupplied this year due to increasing output of high quality, light oil from US shale and lower-than-expected consumption as a result of faltering global economic growth.

There were expectations on Monday that the destruction of more than 1million barrels of oil by a fire at Libya’s main oil port could push Brent over $60, but by the end of the day prices had fallen past previous lows.