Oil prices are tumbling to new lows again Monday.
Brent crude is down another 1.38%, to just $US69.2 per barrel. During trading, the price fell as low as $US68, highlighting the amazing drop in prices: Brent crude was trading for more than $US100 per barrel as recently as the end of August.
WTI, the other major oil price benchmark, is down 0.63% to just $US65.73.
Here’s what the WTI price looks like in historical context:
The price has now passed below lows recorded in 2012, 2011 and 2010, and it’s back to a level last seen in mid-2009, five and a half years ago.
There’s no end in sight to the drop after the OPEC cartel of oil-producing nations failed to agree a production cut last week.
If prices stay depressed, that’s likely too boost consumption: money people don’t spend on petrol and energy bills will be spent elsewhere. According to Oxford Economics, if oil prices stayed near $US60 per barrel through to 2016, it would hike US and Chinese GDP growth by 0.4 percentage points, with a 0.2 percentage point rise for Japan and the eurozone.
One Canadian oil magnate thinks that estimate is actually too conservative: Murray Edwards is suggesting that oil could go back to around $US30 per barrel.