Oil prices in US crash below $27 a barrel
US crude oil has slumped to its lowest price in nearly 13 years following a persistent supply glut of oil on the world market, intensifying worries about the country's economy.
On Thursday, down by about $3.50 per barrel over the three prior sessions, US oil benchmark West Texas Intermediate for delivery in March dived another $1.24 (4.5 percent) to $26.21 a barrel, its lowest close since May 2003.
"We're seeing some ... downtrend in the global economy," said Carl Larry, the Director of Oil and Gas Business Development at Frost & Sullivan. "There's a lack of recovery around the world. That's keeping pressure on the oil market right now."
"As long as demand is going to stay low and the economy is going to stay weak, we're going to see low oil prices maintained," he added.
In London, Brent North Sea crude for April, the European oil benchmark, dropped to $30.06 a barrel, down 78 cents (2.6 percent)from Wednesday's settlement.
According to analysts, sentiment was marred also by a report this week from the Organization of the Petroleum Exporting Countries (OPEC) that showed the cartel's production rose by about 130,000 barrels a day in January.
"With the fundamentals of an unrelenting oversupply still in place and the conflict of interest between OPEC members pumping record high levels... low oil prices may be here to stay for an extended period," said a research analyst at trading group FXTM.
Meanwhile, US stocks witnessed a tumble on Thursday with the Dow Jones Industrial Average dropping by 255 points, or 1.6%, to 15660 and the S&P 500 falling 1.2%. The Nasdaq Composite lost 0.4%.
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