Oil drops $ 2 to five-year low on oversupply

Tuesday, 9 December 2014 01:20 - - {{hitsCtrl.values.hits}}

Reuters: Brent crude oil fell more than $ 2 a barrel on Monday to a new five-year low on predictions that oversupply would keep building until next year after OPEC decided not to cut output. In a report dated 5 December, Morgan Stanley said oil prices could fall as low as $ 43 a barrel next year. The US investment bank cut its average 2015 Brent base-case outlook by $ 28 to $ 70 per barrel, and by $ 14 to $ 88 a barrel for 2016. “Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015,” Morgan Stanley analyst Adam Longson said. Brent for January was down $ 1.82 at $ 67.25 a barrel by 14:00 GMT, having fallen $ 2.30 to $ 66.77 - its lowest since October 2009. US crude was down $ 1.24 at $ 64.60 a barrel, after hitting a session low of $ 64.14. The US contract, also known as West Texas Intermediate, touched $ 63.72 last week, its lowest since July 2009.

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