Crude oil prices on down­ward slide be­low $46

The Star Early Edition - - BUSINESS REPORT -

OIL PRICES fell fur­ther to a new seven-month low yes­ter­day, with the in­ter­na­tional bench­mark for crude slid­ing be­low $46 (R599) a bar­rel. That is just above the price last seen in Novem­ber, when Opec and 10 other oil­pro­duc­ing coun­tries agreed to cut their pro­duc­tion to com­bat a grow­ing sup­ply glut and push the mar­ket up. While Rus­sia, Saudi Ara­bia and other na­tions in­volved in the deal have met their tar­geted cuts, an un­fore­seen in­crease in US sup­ply has coun­tered these ef­forts. With the glut per­sist­ing, the out­look for oil prices has been damp­ened. “As we see it, it is not the events that are putting pres­sure on prices, but above all the shift in sen­ti­ment, the pre­vi­ous op­ti­mism ap­pear­ing to have vir­tu­ally evap­o­rated,” an­a­lysts at Com­merzbank wrote in a note to clients. They pre­dict per­sis­tent neg­a­tive sen­ti­ment could push the in­ter­na­tional bench­mark, Brent, be­low $45 per bar­rel. By late yes­ter­day in Lon­don, it was down 21c at $45.81 a bar­rel af­ter touch­ing a daily low of $45.43. Weak prices mean that, all other things be­ing equal, con­sumers can ex­pect cheaper en­ergy and car fuel. The in­creased sup­ply has been met with a “dis­ap­point­ing” de­mand for oil within the US, an­a­lysts said. –

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