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 The North Sea oil benchmark recovered some ground later but was on
track for its weakest month since the global financial crisis of
2008, and traders said the sell-off that has halved crude prices in
six months showed no sign of coming to an end.
Brent <LCOc1> fell $1.14 a barrel to $56.74, its lowest since May
2009, before recovering to trade around $57.70 by 1215 GMT. U.S.
crude <CLc1> fell 20 cents to $53.41 after hitting $52.70 - also its
lowest since May 2009.
Oil markets have been heavily oversupplied this year due to
increasing output of high quality, light oil from U.S. shale and
lower-than-expected consumption as a result of faltering global
economic growth and competition from alternative fuels.
Several members of the Organization of the Petroleum Exporting
Countries have suffered supply disruptions in recent months, but
this has had little impact on prices.
In Libya, clashes between rival factions have closed oil ports and
terminals this month, reducing exports from the OPEC producer, which
used to sell over 1 million barrels per day of crude to world
markets, to almost nothing.
OPEC, which pumps a third of the world's oil, had been expected to
trim output to try to stabilise prices, but it decided in November
to keep production unchanged and let the market find its own level.
PVM Oil Associates analyst Tamas Varga saw no let-up in the
sell-off, saying "the bears" were in firm control of the market.
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"The trend is still down and supports are expected to be under
pressure. It is not recommended to go against this trend."
Reuters technical analyst Wang Tao said Brent may fall to $54.98
while U.S. oil is expected to drop to $52.10. [TECH/C]
Investors awaited U.S. inventory data. The American Petroleum
Institute was scheduled to release data on Tuesday while the U.S.
Department of Energy's Energy Information Administration will issue
data on Wednesday.
A Reuters poll forecast U.S. crude inventories would show a drop of
900,000 barrels, after a rise to their highest recorded level for
December in the week ended on Dec. 19. [EIA/S]
(Additional reporting by Keith Wallis in Singapore; editing by Jason
Neely)
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