Singapore: Brent crude oil prices fell over $1 per barrel and below $60 for the first time since July 2009 in early European trading today as Chinese factory activity slowed and stumbling emerging market currencies dented demand expectations.
Oil futures have almost halved since June amid rising output and cooling demand, but producer club OPEC has so far resisted calls to cut production to shore up prices.
Data showing activity in China’s factory sector shrank for the first time in seven months in December, adding to a slew of reports showing more fatigue in the world’s No.2 economy, further dragged on oil prices.
“China leaves 2014 on a weak note (and) the calls for further monetary stimulus are getting louder,” Singapore-based Phillip Futures said on Tuesday.
Brent for January delivery was at $59.75 a barrel at 0750 GMT, down $1.31 and to its lowest level since.
US crude for January delivery was at $54.85 a barrel, down $1.06 a barrel.
“The oil market is experiencing a cost re-basement which makes determining when the market is oversold extremely difficult,” US bank Goldman Sachs said.
“For the market to be oversold, it requires prices to be far below costs, (which) are falling nearly as fast as the price, which means oil producers can spend less to get the same or potentially even more in terms of production,” it added.
Analysts said weakening emerging market economies and their currencies were also weighing on oil prices.
