WTI falls to $48.50, Brent below $52 as rout continues

Investing.com - West Texas Intermediate oil futures fell below the $49-a-barrel level on Tuesday, while Brent also hit a fresh five-and-a-half year low, as investors piled on to their short positions in anticipation of lower prices amid lingering concerns over a growing supply glut.

On the New York Mercantile Exchange, crude oil for delivery in February fell to a session low of $48.51 a barrel, a level not seen since April 20009, before trading at $48.93 during U.S. morning hours, down $1.11, or 2.22%.

On Monday, Nymex oil futures plunged $2.65, or 5.03%, to settle at $50.04 a barrel.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery lost $1.10, or 2.01%, to trade at $52.01 a barrel, after hitting a low of $51.25, the weakest level since April 2009.

A day earlier, London-traded Brent prices tumbled $3.31, or 5.87%, to close at $53.11.

Appetite for riskier assets weakened amid uncertainty over Greece’s future in the euro zone if left-wing anti-austerity party Syriza win elections due to be held later this month.

The US dollar index, which measures the greenback against a basket of six major currencies, traded near a nine-year high, boosted by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.

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

Oil traders looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 1.8 million barrels in the week ended January 2.

London-traded Brent prices lost nearly 48% in 2014, while WTI futures dropped almost 46% after the Organization of Petroleum Exporting Countries decided to maintain its output target at 30 million barrels a day.

The decision disappointed hopes the oil cartel would lower production to support the market, as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years.