Oil prices in Asian markets have experienced a further drop as the demand is weak and a continued oversupply puts more pressure on the prices already at their lowest in five and a half years.
On Monday, US benchmark West Texas Intermediate (WTI) for February delivery fell 81 cents to USD 47.55 a barrel in mid-morning trade while Brent crude for February plummeted 90 cents to touch USD 49.21.
“The fundamental factors have not changed much. There is an oversupply and demand is weak,” Daniel Ang, an investment analyst with Phillip Futures in Singapore, said.
He added that prices are expected to fall further this week, with WTI seen reaching a low of USD 45 and Brent USD 48.
Singapore’s United Overseas Bank, meanwhile, said that oil prices continued to drop and headed for a seventh straight weekly loss as “key producers show no sign of cutting output in the face of a supply glut.”
Crude prices were well above USD 100 a barrel, but have lost over 50 percent of their value since the middle of 2014.
The Organization of the Petroleum Exporting Countries, which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market mainly due to opposition from Saudi Arabia.