Brent crude futures fall below $50/bbl for first time since 2009

SINGAPORE (ICIS)–ICE Brent crude futures fell below $50/bbl for the first time since 2009 before regaining some ground amid a stronger US dollar, concerns over global economic growth and a well supplied oil market.

At 10:03 GMT, February Brent crude on London’s ICE futures exchange was trading at $50.68/bbl, down by $0.42/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $49.66/bbl, down by $1.44/bbl and the lowest price since 29 April 2009.

February NYMEX light sweet crude futures (WTI) were trading at $47.60/bbl, down by $0.33/bbl from the previous close. Earlier, the US benchmark fell to a low of $46.83/bbl, down $1.10/bbl and the lowest price since 21 April 2009.

The US dollar strengthened against leading currencies such as the Euro and Yen on Wednesday, making US dollar denominated commodities such as oil more expensive for international buyers.

Prices continued to be pressured by muted demand growth which has been undermined by an economic downturn in Europe and a slowdown of growth in China.

Meanwhile, increased global production growth has outstripped demand, buoyed by the US shale oil boom and the OPEC decision not to cut production. 

Inventory data released on Tuesday by the industry body, the American Petroleum Institute (API), revealed a surprise drawdown in US crude stocks. However, this was countered by a build in inventories of gasoline and distillates. Traders now await the release of official US government inventory data from the Energy Information Administration (EIA)

Crude oil prices have fallen sharply from highs hit in June when values were buoyed by Islamic militant advances in Iraq. ICE Brent crude futures are now down more than 50%, since hitting a year high of  $115.71/bbl in June 2014.