Oil price slumps to lowest in a year

OIL PRICES fell more than 4 per cent on Thursday, hitting their lowest in more than a year on worries about oversupply and the outlook for energy demand as a US interest rate rise knocked stock markets.

Equities dropped worldwide after the US Federal Reserve raised rates and maintained most of its guidance for additional hikes over the next two years, dashing investor hopes for a more dovish policy outlook.

US light crude oil fell by $2.35 a barrel, or 4.9 per cent, to a low of $45.82, before recovering some ground to around $46.45.

Brent dropped by $2.60, or 4.5 per cent, to $54.64 a barrel, its lowest since September 2017, and last traded around $55.54, down $1.70.

Both major oil futures contracts rallied sharply on Wednesday but are now at or close to their lowest levels for over 15 months, more than 30 per cent below multi-year highs reached at the beginning of October.

“Oil prices are selling-off once again as market players take their cues from a rout on global stock markets,” said Stephen Brennock, analyst at London brokerage PVM Oil.

The Organization of the Petroleum Exporting Countries and other oil producers including Russia agreed this month to curb output by 1.2 million barrels per day in an attempt to drain tanks and boost prices.