Decades and slowing growth in global consumption
Futures are poised to fall below half where they were six months ago, according to a Bloomberg survey today. Oil slid into a bear market this year amid the highest U.S. production in three decades and slowing growth in global consumption.
“The elements that brought us down this far haven’t changed,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “The move lower should extend downward. The bottom of this move isn’t in sight yet.”
West Texas Intermediate for January delivery declined $1.90, or 3.3 percent, to $55.91 a barrel on the New York Mercantile Exchange. It’s the lowest settlement since May 2009. Total volume was 46 percent above the 100-day average at 2:51 p.m. WTI has dropped 43 percent this year.
Brent Futures
Brent for January settlement slipped 79 cents, or 1.3 percent, to end the session at $61.06 a barrel on the London- based ICE Futures Europe exchange. It was the lowest close since July 2009. The grade has fallen 45 percent in 2014. Volume was 4 percent above the 100-day average. The North Sea oil closed at a $5.15 a barrel premium to WTI, the most in six weeks.
The European benchmark will slide to as low as $50 a barrel in 2015, according to the median in a Bloomberg survey today of 17 analysts, down from the $115.71 a barrel high for the year on June 19. The grade has already collapsed 47 percent since then and needs to fall further before producers clear the current glut, said five out of six respondents who gave a reason.