Oil price plunges to 11-year low
Mon: The price of Brent Crude fell to levels last see in July 2004 as a production glut continued to overhang world markets.
Brent crude for February delivery was down 80 cents at $36.08 a barrel in London trading in earlier trading with no sign that OPEC will ease off in its attempt to squeeze the cheaper shale oil producers in the US.
One trader noted: “It remains clear that OPEC’s decision to leave production unchanged is motivated by the hope of regaining market share and pushing away other competitors from the market.”
He said a “catalytic combination” of an unrelenting oversupply mixed with the slowing demand in the global markets may offer bears the momentum for a potential decline towards $32.40.
Oil has lost a fifth of its value in the last month and a third since early October.
Goldman Sachs has hinted that oil may fall to $20 a barrel, a view that is beginning to gain some support.
The FTSE 100 was up 53 points at 6,105 near the close but closed down 17.6pts at 6,034.84.