Oil prices will just not stop falling. Brent crude is down again today, to the lowest level since May 2009. It’s just dropped below $US50 for the first time in six years.
That follows West Texas Intermediate crude oil, the other benchmark price, which dropped below $US50 two days ago. WTI just broke below $US47 for the first time in six years too.
Both are down by more than half since this time last year, when the price was well over $US100.
This is how Brent looks today.
At 9.30 a.m. GMT (4.30 a.m. ET) it was trading back up at $US50.47 a barrel, above the $US50 threshold but still losing 1.23% from its previous value.
While WTI crude at 9.30 a.m. GMT (4.30 a.m. ET) was sold at $US47.40, just after it dipped as low as $US46.87 a barrel.
Nobuyuki Nakahara, a former oil executive and ex-member of the Bank of Japan’s policy board, told Reuters on Wednesday he also expected further price falls.
“Oil prices are likely to keep falling due to slower Chinese growth and because the years of prices above $US100 before the recent plunge were ‘abnormal’ historically,” he said.
“I would not be surprised if the price falls to as low as around $US20… It is purely due to supply and demand. There is a ceiling for oil because high energy prices dampen economic growth,” he added.
Here’s Brent again in some historical context. If the price keeps tumbling below about $US45 per barrel it will break lower than the 2008-9 period, towards levels last seen in 2006: