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Brent oil futures sink to 4-year low amid global supply glut

Published 11/11/2014, 03:54 AM
Brent oil falls to 4-year low amid ample global supplies
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Investing.com - Brent oil futures sank to the lowest level in more than four years on Tuesday, as ongoing concerns over a glut in world markets continued to drive prices lower.

On the ICE Futures Exchange in London, Brent for January delivery fell to a daily low of $81.83 a barrel, a level not seen since October 2010.

Prices recovered to last trade at $82.36 a barrel during European morning hours, down 59 cents, or 0.71%.

A day earlier, London-traded Brent futures lost $1.02, or 1.21%, to settle at $82.95 a barrel.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in December shed 67 cents, or 0.86%, to trade at $76.74 a barrel.

On Monday, New York-traded oil futures tumbled $1.25, or 1.59%, to close at $77.40. Nymex oil fell to $75.84 a barrel on November 4, the lowest level since October 2011.

Kuwait's Oil Minister Ali Al-Omair said on Monday that the Organization of the Petroleum Exporting Countries will not cut output to support oil markets when it meets in Vienna later this month.

London-traded Brent prices have fallen nearly 30% since June, when it climbed near $116, while WTI futures are down almost 29% from a recent peak of $107.50 in June.

Concerns over weakening global demand combined with indications that OPEC producers will not cut output to support oil markets have weighed on prices in recent weeks.

Some market analysts believe that only a cut in production by the oil cartel will halt the decline in prices.

Oil ministers from the 12-member group are scheduled to meet in Vienna on November 27 to discuss how to react to falling oil prices and whether to adjust their production target for early 2015.

Meanwhile, the dollar remained well bid amid expectations that the Federal Reserve will raise interest rates ahead of its other major peers.

The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, picked up 0.18% to trade at 88.03, just below a four-year high of 88.31 hit late last week.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

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