Will refrain from curbing output
Crude oil dropped to the lowest level in more than five years after the United Arab Emirates said OPEC won't rein in production in response to the slump.
The Organization of Petroleum Exporting Countries will refrain from curbing output even if prices fall as low as $40 a barrel US, U.A.E. Energy Minister Suhail Al-Mazrouei said. Prices have slipped about 20 percent since OPEC decided against cutting production to tackle the glut at a Nov. 27 meeting. The group has pumped more than its output target of 30 million barrels a day for the last six months.
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.