Oil Drops to 5-year Low
CBJ – The decline in oil prices continued on Monday with Brent and U.S. crude oil each dropping more than $2 a barrel to a new five-year low. The cause for the drastic drop is due to a world oversupply that is expected to extend well into next year and perhaps beyond. OPEC member Kuwait expects the oversupply will remain for at least six months.
Prices continued to fall following a Morgan Stanley report that revised its oil price forecasts lower. In a report dated Dec. 5, Morgan Stanley said oil prices could hit as low as $43 a barrel next year. The U.S. investment bank cut its average 2015 Brent base-case outlook by $28 to $70 per barrel, and by $14 to $88 a barrel for 2016.
Brent for January was down $2.42 at $66.62 a barrel by late morning, its lowest since October 2009. U.S. crude was down $2.27 at $63.55 a barrel, a session low, its lowest since July 2009.