London: Oil prices tumbled yesterday with Brent crude diving to the lowest point for almost seven years, as the market was plagued by Opec’s refusal to cut output.
In afternoon trade, European benchmark Brent North Sea crude for January delivery hit $41.05 per barrel — a level last seen on February 24, 2009.
The January contract for West Texas Intermediate crude sank $2.32 to $37.65 a barrel on the New York Mercantile Exchange, a drop of 5.8 percent.
In late afternoon deals yesterday, Brent stood at $41.16, down $1.84 from Friday’s closing level. WTI was $1.88 lower at $38.09.
The Organisation of the Petroleum Exporting Countries (Opec) decided on Friday against cutting output to raise prices. The cartel took no action to shore up the market. “The decision by Opec members to keep oil production output at record high levels has seen oil prices plummet again,” said Sanjiv Shah, chief investment officer of Sun Global Investments.
He added that the decision “suggested that the organisation was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term”.
AFP
