Oil prices continued their rout on Tuesday with Brent crude and U.S. WTI both falling to their lowest in almost six years, as a persistent global supply glut offset data showing record high imports by key consumer China.
The benchmark prices have plunged 60 per cent from their 2014 peaks hit in June, dragged down by losses of more than 36 per cent seen in the past seven weeks.
“Oversupply and weak demand still plagues the oil market. These fundamental factors … will continue to push it down if (they) do not change,” Singapore-based Phillip Futures said.
February Brent crude fell more than three per cent to a low of $45.84 a barrel by 0655 GMT, the lowest since March 2009. U.S. crude for February was trading at $44.90 a barrel, after reaching $44.86 earlier, its weakest since April 2009.
The falls came despite record Chinese crude imports for December, which rose above seven million barrels a day for the first time as the world’s No.2 oil consumer took advantage of low prices to build up its strategic reserves.
Banks have slashed their oil price outlooks, with analysts at Goldman Sachs cutting their average forecast for Brent in 2015 to $50.40 a barrel from $83.75.
They lowered their U.S. crude outlook to $47.15 from $73.75, saying it would need to stay near $40 for most of the first half of 2015 in order to curb production and end a global supply glut.
Dutch bank ABN Amro also cut its outlook, seeing an average Brent price of $60 in 2015 and $55 for U.S. WTI crude.
Macquarie said in note this month that it saw oil markets in the midst of a commodities fundamental cycle of “severe price decline” due to strong supply growth and high stocks.