LONDON: New York oil prices sank to a six-year low on Monday, falling below $44 per barrel as the market was plagued by plentiful supplies and the strong dollar.
In earlier deals, US benchmark West Texas Intermediate (WTI) for April delivery dived as low as $43.57 — hitting the lowest since March 12, 2009.
The contract later recovered slightly to stand at $44.40, down 44 cents from Friday’s closing level.
European benchmark Brent North Sea crude for April fell 79 cents to $53.38 a barrel in midday London trade.
Crude futures had plunged by more than two dollars on Friday after the International Energy Agency (IEA) warned of US crude reserves reaching storage capacity with little sign of a slowdown in output despite a global glut.
“Selling pressure was generated on Friday by the IEA, which warned that storage capacities could soon be exhausted in the United States,” said
“The reason cited by the IEA was the massive oversupply, which stems first and foremost from the still rising US oil production.”
The US Department of Energy last week said stockpiles in the world’s top crude consumer climbed to a fresh record high of 448.9 million barrels last week.
“This week could be even more bearish for oil as there has been no shift in supply,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.
Singapore-based Phillip Futures said “with fundamentals remaining unchanged, we hardly find a reason for crude oil to break higher or even lower”.