Benchmark Brent crude slipped to its lowest in five years on Tuesday, dropping below $66 a barrel after plunging more than 4 percent the day before on worries over a deepening supply glut. The chief executive of Kuwait’s national oil company on Monday said oil prices were likely to remain around $65 a barrel for the next six or seven months, the latest indication that Gulf producers are ready to ride out plunging prices.
Brent has fallen over 40 percent since June with losses deepening in late November after the Organization of the Petroleum Exporting Countries (OPEC) decided not to cut its output target. Since then, top oil exporter Saudi Arabia has reduced its monthly prices for crude it sells to the United States and Asia, a move that analysts say show it is stepping up its battle for market share.
“Short term sentiment is to remain weak for crude oil given the oversupply expected in 2015 and leveraged funds still have further selling to do before fund positioning returns to neutral,” ANZ analysts said in a note. Brent crude for January delivery was down 43 cents at $65.76 at 0257 GMT (09:57 p.m. EST) on Tuesday – its lowest since October 2009.
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