Oil market plumbs new five-year lows

FE Team | Published: December 07, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

LONDON, Dec 6 (AFP): Oil struck fresh five-year low points this week on the back of the strong dollar, oversupply fears and major producer Saudi Arabia slashing its export prices.
The market had already dived last week after the Organization of Petroleum Exporting Countries (OPEC) left its output ceiling unchanged, despite a global supply glut.
Crude futures have now slumped by about 40 per cent since June, faced also with cheaper oil being extracted from North American shale rock.
Weak economic data has added to the pressure, with worse-than-expected manufacturing figures in China, the world's largest energy consumer.
Commodities were also hit late Friday as the dollar rallied on bright data showing the US economy created 321,000 new jobs in November, some 90,000 more than expectations.
OIL: Crude futures sank to fresh five-year lows on Monday, with New York crude hitting $63.72 a barrel -- the lowest level since July 2009.
London Brent oil touched an October 2009 low of $67.53 a barrel, before staging a technical rebound.
Oil dipped Tuesday after the Iraqi government and autonomous Kurds struck a deal that will boost the nation's crude oil exports to an already oversupplied global market.
Under the deal, due to take effect at the start of 2015, 250,000 barrels per day of oil will be exported from the autonomous region and another 300,000 bpd from the disputed province of Kirkuk.
The agreement could help push OPEC member Iraq's daily output past three million barrels per day, up from around 2.5 million barrels in November.
The oil market diverged Wednesday as traders digested a drop in US crude inventories, which tends to signal strong demand.
However on Thursday and Friday, crude futures hit reverse gear once again, dented by reports that Saudi Arabia has trimmed its export prices and is doing nothing to tighten supplies.
Saudi Arabia is the biggest and most influential member of the 12-nation OPEC cartel.
PRECIOUS METALS: Gold prices advanced as dealers shrugged off the rallying dollar and brighter-than-anticipated non-farm payrolls (NFP) data.
The reaction "suggests that the dollar is no longer having as much impact on gold's direction as it had previously", noted analyst Razaqzada.
BASE METALS: Base or industrial metal prices mostly climbed despite weak Chinese manufacturing data.
China's official purchasing managers index fell to an eight-month low of 50.3 in November from 50.8 in October.
COCOA: Prices forged ahead this week as traders shrugged off supply jitters for the commodity that is mostly used to produce chocolate.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in March rose to £1,922 a tonne from £1,901 a week earlier.
SUGAR: The price of sugar hit three-month troughs on speculative selling and abundant global supply.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in March reversed to $395.20 from $413.80 a week earlier.
COFFEE: The coffee market also registered losses.
"The price fall was sparked by reports that Brazil exported 2.86 million bags of coffee in November -- more than the 2.71 million bags exported last November," said Commerzbank analysts.
RUBBER: Kuala Lumpur rubber prices fell due to lower oil prices and the weakening ringgit currency.
The Malaysian Rubber Board's benchmark SMR20 dipped to 148.10 US cents a kilo from 151.30 US cents the previous week.