Brent crude falls to 2004 low as market rout heads into Christmas 

Brent crude oil prices fell to levels last seen in 2004 on Monday, dropping below the lows hit during the 2008 financial crisis on renewed worries over a global oil glut, with production around the world remaining at or near record highs and new supplies looming from Iran and the United States.

Brent futures fell almost 2 percent and as low as $36.17 per barrel trading around 0500 GMT, the weakest since 2004 and below the $36.20 low reached on Christmas eve 2008.

U.S. West Texas Intermediate (WTI) futures were down 33 cents at $34.40 per barrel and close to last Friday’s 2015 lows.

Both benchmarks are down more than two-thirds since mid-2014 when the rout began.

Analysts said a strong dollar following last week’s U.S. interest rate hike, which makes oil consumption more expensive for countries using different currencies, as well as a renewed increase in U.S. oil rig counts were weighing on crude prices.

“The U.S. oil rig count bounced back this week, up by 17 (to 541), putting an end to four consecutive weekly declines,” Goldman Sachs said.

“The increase in rig count even in a low crude oil price environment suggests shale producers are committed to maintaining production levels. The resilient production data reflect rising U.S. crude stockpiles, which have surged to 491 million barrels, the most for this time of year since 1930,” ANZ bank said.

The U.S. glut adds to global oversupply as the main producers, including Russia and the Organization of the Petroleum Exporting Countries (OPEC), pump hundreds of thousands of crude every day in excess of demand.

Russian production has surpassed 10 million barrels per day (bpd), its highest since the collapse of the Soviet Union while OPEC output also remains near record levels above 31.5 million bpd.

“The U.S. oil rig count bounced back this week, up by 17 (to 541), putting an end to four consecutive weekly declines,” Goldman Sachs said.

“The increase in rig count even in a low crude oil price environment suggests shale producers are committed to maintaining production levels. The resilient production data reflect rising U.S. crude stockpiles, which have surged to 491 million barrels, the most for this time of year since 1930,” ANZ bank said.

The U.S. glut adds to global oversupply as the main producers, including Russia and the Organization of the Petroleum Exporting Countries (OPEC), pump hundreds of thousands of crude every day in excess of demand.

Russian production has surpassed 10 million barrels per day (bpd), its highest since the collapse of the Soviet Union while OPEC output also remains near record levels above 31.5 million bpd.

Source: CNBC – Brent crude falls to 2004 low as market rout heads into Christmas

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