Crude oil prices on downward slide below $46

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. –