Oil prices are sliding even further in early trading, with the commodity stumbling for the fifth consecutive day.
Brent crude fell 90 cents, or 1%, to $US81.92, its lowest value since 2010.
While West Texas Intermediate (WTI) crude dropped to $US76.59, down 70 cents from yesterday. It was its lowest reading since September 2011.
However, it fought back on Wednesday and is now trading at $US76.94
The FT reports that both Brent and WTI prices are down 29% from their peak in June this year, when the advance of ISIS had threatened to sink production in Iraq.
The oil price collapse is particularly hitting countries like Venezuela, Nigeria and Saudi Arabia. However, analysts report that the Saudis are prepared to let the price slip even further to preserve their share in the US market, which has come under intense pressure from the shale boom.
In order to make a profit, shale oil producers need the crude price to be around $US76-77, otherwise their product would not be competitive against overseas production. Saudi Arabia, the world’s largest producer of crude, is determined to maintain its position against competitors in the US.
The oil price is also impacting the Russian economy, already shattered by Western sanctions over Ukraine. Today the Rouble hit a new record low despite billions of dollars being spent by the country’s central bank to prop it up.