Oil hits new multi-year lows as Brent dips below $40

WTI settled down 14 cents at $37.51, after sliding to $36.64 earlier.

Internationally traded Brent futures were down 47 cents at United States dollars 40.26 a barrel by 9:46 a.m. EDT (1446 GMT), having fallen below USD 40 per barrel earlier in the session for the first time since March, 2009.

In its European oil market forecast PIRA Energy said: “Brent crude prices will continue to struggle due to a large global commercial oil stock surplus, which PIRA estimates will total 500 million barrels above normal levels by end 2015”.

Oil fell another 2% on Tuesday and collapsed below $37 a barrel for the first time since the depths of the Great Recession in February 2009.

Please enter your email. Supply is now thought to be 0.5m to 2m barrels a day in excess of demand.

Several OPEC sources told the news wire that the group’s members decided that dropping reference to the output ceiling, rather than raising its production target, would have less of a negative impact on crude prices.

The latest oil plunge is rocking the stock market, with shares of Big Oil companies like ExxonMobil and Chevron retreating further in recent days.

LONDON – Oil prices rose on Wednesday on strong Japanese economic data and lower crude oil storage figures from the USA, but many investors expected a fall to below 2008 lows due to a mounting global supply glut.

On the demand side, China’s appetite for cheap oil was helping to support prices as the government looks to build up its strategic reserves.

Oil has slumped about 40 percent since Saudi Arabia led OPEC’s decision a year ago to maintain output and defend market share by pressuring higher-cost producers. The outlook for oil demand in Asia was boosted by news of an unexpected jump in Japan’s core machinery orders in October and by reforms aimed at encouraging imports in China, including of energy-intensive machinery. US crude futures are approaching their level of $25 a barrel in March, 2002, after oil prices tumbled in the wake of the September 11 terror attacks. The International Energy Agency said oil inventories went up to around three billion barrels. With a history of exceeding its production rates, which were previously at 30 million barrels and are now at 31.5 million barrels, OPEC is not to be trusted.

Western sanctions against Iran have restricted crude exports to 1 million barrels a day from a high of 2.5 million barrels per day since 2012.