SINGAPORE (AFP) – Oil tumbled to new multi-year lows in Asia on Monday, extending a sharp sell-off last week that came in response to OPEC’s decision to maintain crude output despite a supply glut and plunging prices.
US benchmark West Texas Intermediate (WTI) for January delivery dipped $1.49 in midday Asian trading to $64.66, its lowest intraday level since July 2009.
Brent crude for January sank $1.64 to $68.51, to stay below the psychologically important $70 level. It had touched $67.90 earlier Monday, its lowest since February 2010.
“Negative actions in the oil market are continuing today. Investors see crude as remaining vulnerable after last week’s OPEC announcement,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.
“We have not yet seen any piece of news or development that could trigger a bottoming out phase in oil prices,” he added.
The unabated price plunge comes after the 12-nation Organization of Petroleum Exporting Countries (OPEC) opted Thursday to keep its collective output ceiling at 30 million barrels per day, where it has stood for three years.
OPEC ignored calls for a cut that have grown as an oversupply and weak demand have wiped more than a third off prices since June, with analysts warning of further falls to come.
“OPEC’s decision leaves demand and supply rebalancing to the market,” banking group ANZ said in a market commentary.
The news dragged WTI down $7.54 in New York on Friday, compared with the settlement price on Wednesday, to end at $66.15 a barrel. US floor trading was closed Thursday for a holiday.
Brent had settled at $70.15 on Friday, down $2.43 from Thursday’s close.
OPEC has come under pressure from its poorer members, including Venezuela and Ecuador, to trim production as slumping prices have eaten into government revenues and raised fears over their economies.
But the group’s powerful Gulf members, led by kingpin Saudi Arabia, resisted the calls unless they are guaranteed market share – particularly in the United States, where rising production of shale oil has contributed to the global glut.
McCarthy said weak Chinese manufacturing data early Monday was “doing nothing to help oil prices”.