Brent Oil prices have fallen to levels we have not seen since 2004, with both WTI and Brent benchmarks losing a minimum of 35% since the beginning of 2015 alone.
Brent prices for front-month February delivery, dropped by almost 2% to just $36.15(£24.26) per barrel on the ICE Futures Europe Exchange on Monday. This is the lowest intraday level we have seen since July 2004.
U.S Benchmark West Texas Intermediate also fell by almost 1% to just $34.41(£23.09) per barrel, amidst a global surplus in oil supply, which is affecting global oil companies like Exxon Mobil – the manufacturers of Mobil DTE 25 – as well as Shell and BG Group.
Analysts commented that since both members and nonmembers of the Organization of Petroleum Exporting countries continue to fight it out for market share, oil prices are likely to suffer for the foreseeable future.
Philip Futures energy analyst Daniel Ang said:
“The market is quite weak right now and for Brent to fall to $35(£23.49) a barrel is very possible in the near term but soon bargain-hunting by some hedge-fund managers will likely kick in to lift prices.”
Oil prices have also taken a beating from the strengthening U.S. dollar, which is the industry standard for the oil trade, and which has made the purchase of oil more expensive for those traders using foreign currency.
Despite declining oil prices, in the week commencing December 14, the U.S. active oil rig count rose from 524 to 541 and the number of U.S. crude inventories was tallied at 490 million barrels – the highest number in 80 years.