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Oil prices hit fresh lows since 2009
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[NEW YORK] Oil prices slipped toward nearly six-year lows on Tuesday after Opec officials underscored the cartel's resolve to not cut output despite a supply glut and plunging prices.
US benchmark West Texas Intermediate for February fell 18 cents to settle at US$45.89 (S$61.20) a barrel on the New York Mercantile Exchange, its lowest close since March 11, 2009, when it finished at US$42.33. The contract had traded below US$45 early in the session.
In London, Brent crude for February delivery, the international benchmark futures contract, finished at US$46.59 a barrel, down 84 cents from Monday, when it closed below US$50 for the first time since April 2009.
WTI and Brent shed more than US$2 a barrel on Monday, after investment bank Goldman Sachs lowered its crude oil price forecasts.
"The latest Opec member to hit the wires is the UAE, saying that Opec members can withstand the crude drop, and that US shale drillers will be the first to curb production," said Matt Smith of Schneider Electric.
"This is adding fuel to the fire after yesterday's sell-off, and a stronger dollar and a potential build to crude stocks from tomorrow's weekly US inventory report is encouraging another sell-off."
The United Arab Emirates said on Tuesday that the cartel could not stop world prices falling - and called for a cut in booming shale oil output in the United States.
Analysts say that richer cartel members - like the UAE and Saudi Arabia - have been ready to accept the price fall in the hope that it will force higher-cost shale producers out of the market.
"We cannot continue to be protecting a certain price," UAE Energy Minister Suhail al-Mazrouei said.
"We have seen the oversupply, coming primarily from shale oil, and that needed to be corrected," he told participants in the Gulf Intelligence UAE Energy Forum in Abu Dhabi.
Kuwaiti Oil Minister Ali al-Omair said: "We expect this situation to continue until the surplus on the market is absorbed and the world economy improves."
Global oil prices have slumped by almost 60 per cent since June as the market faces abundant supplies, demand fears and a strong dollar in a stuttering global economy.
The slide accelerated in November when the Organisation of the Petroleum Exporting Countries, which provides about 30 per cent of global supplies, kept its production ceiling at 30 million barrels per day.