Oil continues to fall in Asia

FE Team | Published: January 13, 2015 00:00:00 | Updated: November 30, 2026 06:01:00

SINGAPORE, Jan 12 (AFP): Oil fell further in Asia Monday, with weak demand and a supply glut putting relentless pressure on prices already at their lowest in five and a half years, analysts said.
US benchmark West Texas Intermediate (WTI) for February delivery was down 84 cents at US$47.52 a barrel in afternoon trade and Brent crude for February dropped 81 cents to 49.30.
"The fundamental factors have not changed much. There is an oversupply and demand is weak," said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
The outlook is for prices to decline further this week, with WTI seen touching a low of $45 and Brent $48, Ang told the news agency.
"Oil prices continued to tumble and headed for a seventh straight weekly loss as key producers show no sign of cutting output in the face of a supply glut," Singapore's United Overseas Bank said in a commentary.
Crude prices have lost more than half their value since the middle of last year when they sat well above $100 a barrel.
Members of the Organisation of the Petroleum Exporting Countries, which pumps about 40 per cent of the world's oil, have said they will not cut production despite excessive supplies.
Another Reuters report from Dubai/Doha adds: A diplomatic push by Venezuela and Iran for an Organisation of the Petroleum Exporting Countries (Opec) oil output cut has failed to soften the refusal of the group's Gulf members to do so for now, delegates said on Monday.
An oil price sinking under $49 a barrel on Monday is twisting the knife in Venezuela's steadily shrinking economy and in sanctions-bound Iran.
Venezuelan President Nicolas Maduro on Sunday met Saudi Arabia's Crown Prince Salman in Riyadh before heading to Qatar and Algeria on a tour to discuss the oil price crisis.
Iran's supreme leader Ayatollah Ali Khamenei also weighed in and told Venezuela's president on Saturday he backed coordinated action between Tehran and Caracas to reverse the more than 50 per cent drop in crude since June 2014.
But the Gulf members of the Opec, who account for more than half of the 12-member group's output, are holding to their stance from Opec's November meeting in Vienna.
"There's a push from Venezuela for a cut, this is what they argued in Vienna and this is what they are lobbying for now. But from what I see there is no sign of cutting production from the Gulf states," a Gulf Opec delegate said.
"The only solution is to have the market absorb this surplus and the extent of that will be assessed by Opec by ministers during their meeting in June."
Another delegate said: "You need to give it some time to see the effect on prices. I think the Saudi oil minister was very clear on that."
Saudi Oil Minister Ali al-Naimi has said he convinced his fellow Opec ministers that it is not in the group's interest to cut oil output however far prices may fall.
During Maduro's visit to Saudi Arabia, it was agreed that a high-level commission between the two countries would meet every four months to review the market, a diplomatic source said.