Oil fell more than $2 a barrel to a five-year low in Asian trade on Monday, extending a steep sell-off after OPEC decided not to cut production last week, keeping markets well supplied. Both U.S. crude and Brent have fallen for five straight months, oil’s longest losing streak since the 2008 financial crisis.
“Just when the market was thinking that a 4-year low for crude oil was bad enough, we have hit a 5-year low after the OPEC meeting,” Phillip Futures analysts said in a note. U.S. crude tumbled to near $64, dragging Brent down below $70, after Saudi Arabia’s oil minister told fellow OPEC members last week that they must combat the U.S. shale oil boom.
“They (OPEC) can get by at $60 a barrel, but that price would knock out a fair whack of the competition – much U.S. shale oil for example – as well as put investment in future capacity growth firmly on the back-burner,” ANZ analysts said in a note. “They’re playing the long game, banking that others can’t.”