Oil Prices Fall to New Low Five Years

New York (Antara Bali) - Global oil prices fell to a new multi-year on Monday (Tuesday morning GMT), after OPEC officials stated that most of the speculation has pushed the market lower, indicating the cartel will maintain production unchanged.

The benchmark US light sweet crude or West Texas Intermediate (WTI) for January delivery lost 1.90 dollars, closed at the New York Mercantile Exchange at 55.91 dollars, the lowest level since early May 2009.

The European benchmark, Brent North Sea crude for January delivery settled at 61.06 dollars a barrel in London, down 79 cents from the closing level on Friday .

Oil show a small increase in early European trade from steep losses last week, but it quickly evaporates, disrupt European stock markets.

Oil prices have fallen about 50 percent since June, pressured by abundant supplies, a stronger dollar and weaker demand due to the global economic slowdown, according to analysts.

"The movement in oil while still showing recovery and prices continue to decline and remove most of their stock market gains," Jasper said Lawler, an analyst at CMC Markets UK.

Lawler said "lower oil prices almost strictly increasing demand in the long term but the realization regulated market that part of the reason the price falls rapidly today because of slowing global demand."

On Sunday, Abdalla Salem el-Badri, Secretary General of the 12-nation Organization of Petroleum Exporting Countries (OPEC), suggests that speculation was behind the steep drop in prices.

"When we look at the supply and demand, there is an increase (supply) but only moderate which should not cause a reduction of up to 50 percent," Badri told reporters in a conference in Dubai.

"Speculation greatly contributed to push oil prices down."

OPEC oil cartel last month decided to maintain current production levels, although there is a request by some manufacturers to cut production in order to curb the decline in prices.

"The notion that the oil market will balance themselves leave the downside, it could happen at a rate that is much lower price," said Tim Evans of Citi Futures. (MFD)