The price of Brent crude oil dropped nearly $2 a barrel today to a new five-year low following oversupply forecasts.
Reuters reported that Brent crude for January was down $1.45 at $67.62 a barrel, while US crude was down $1.16 at $64.68 a barrel.
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At OPEC’s recent meeting in Vienna, Austria, Saudi Arabia did not agree to an output reduction proposed by other members of the group who suggested the change in policy due to continuing market oversupply.
The oil market was further depressed after indications that the US shale industry will be further affected by the fall in crude prices.
Mixed trade data from China revealed that the country’s imports fell 6.7% in November and export growth slowed, further pressurising oil prices.
China’s crude oil imports grew 9% in November from October to 6.18 million barrels per day, indicating the country may be increasing its reserves.
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By GlobalDataPetromatrix oil analyst Olivier Jakob was quoted by Reuters as saying: "If one looks at the overall economic indicators, they are all showing a picture of China, which is stagnating rather than having strong growth."
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