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Brent hits 11-year low as oil extends slide on glut worries

21 december 2015, 13:49

European benchmark Brent crude slid to an 11-year low on Monday as oil prices resumed their slide in an oversupplied global market facing the prospect of renewed US exports, AFP reports.

At 0615 GMT, Brent crude for delivery in February was down 44 cents at $36.44 a barrel after the European benchmark touched lower intra-day levels.

US pricing standard West Texas Intermediate for January delivery was down 24 cents at $34.49.

“There hasn’t been any significant signs of a pick-up in demand and we haven’t seen any meaningful cuts to production,” Ric Spooner, a chief analyst at CMC Markets in Sydney, told Bloomberg news.

“Nothing has really changed in the oil market over the past couple of months apart from the price.”

Brent slid by as much as 71 cents to $36.17 a barrel on the London-based ICE Futures Europe exchange, the lowest level in intraday trade since July 13, 2004, Bloomberg said.

The commodity has sunk more than 60 percent from above $100 in summer 2014.

Prices have particularly slumped since December 4 when the OPEC oil producers' group decided against limiting production, despite tepid demand and the supply glut.

Oversupply woes were also stoked on Friday by the Baker Hughes US oil rig count, which showed an increase of 17 for the week ending December 18 to 541 rigs.

This added to "the already prevailing negative sentiments in the market due to the build-up in inventory", said Sanjeev Gupta, head of the Asia-Pacific Oil and gas practice at professional services organisation EY.

US lawmakers last week lifted a 40-year ban on oil exports, marking a historic shift even though it is still largely symbolic in the futures market.

Gupta warned it could be "negatively impacting long-term futures prices".

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