Oil extends fall amid weakening demand

by Jacob Gronholt-Pedersen, January 12 2015, 07:15

• inShare
• Kindle
• 

•  
• 
  

Clip this article

Picture: THINKSTOCK

SINGAPORE — Global oil prices extended their slide on Monday weighed by weakening demand in Europe and Asia, while refineries in Philadelphia and Ohio were hit hard by fires at the weekend, curtailing demand for crude in the US.
Both Brent and US crude are at their lowest since April 2009 and have ended down for the past seven consecutive weeks.
The weakness across oil markets became evident last week when for the first time since 2009, the entire oil complex slipped into contango, a market structure where prices for immediate delivery are cheaper than for delivery in future months.
US crude oil futures for February fell 78c to $47.58 a barrel by 1.44am GMT. The February Brent contract was down 93c at $49.18 a barrel.
Refinery disruptions in Philadelphia and Ohio threaten to add to a growing glut of crude by reducing demand from two sizeable plants, including the largest on the US East Coast.
The disruptions also curtailed production of oil products, initially boosting prices for diesel and petrol.
New oil and gas well permits issued across the US rose slightly in December after falling sharply in November on tumbling crude prices, data showed.
The drop in November pointed to a potential slowdown in the shale oil and gas boom that brought the US head to head with Saudi Arabia as the world’s top crude producer.
Venezuela said in a statement on Sunday it had agreed with Saudi Arabia to work to recover the oil market and oil prices "with state policies" between the two countries, without providing details.
Saudi Arabia, the world’s biggest oil exporter, has said it will not support prices by cutting production and ignored calls from smaller Organisation of the Petroleum Exporting Countries (Opec) members, including Venezuela, to react to falling oil prices at a meeting of the cartel in November.