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US oil price falls below $50 on supply glut fears | US oil price falls below $50 on supply glut fears |
(about 5 hours later) | |
The US oil price fell below the symbolic threshold of $50 a barrel for the first time since April 2009, before finishing the day at $50.05. | |
The price of Brent crude also fell on Monday, dipping 6% to $53 a barrel. | |
The price of both Brent crude and US oil, known as West Texas Intermediate crude, have now lost more than half of their value since mid-2014. | The price of both Brent crude and US oil, known as West Texas Intermediate crude, have now lost more than half of their value since mid-2014. |
Investors are worried that combination of a global supply glut and weak demand could cause prices to tumble further. | Investors are worried that combination of a global supply glut and weak demand could cause prices to tumble further. |
US oil production has soared recently, as fracking - or the process of extracting oil from shale rock by injecting fluids into the ground - has revolutionised oil production in the country, transforming US states such as North Dakota and Pennsylvania in the process. | US oil production has soared recently, as fracking - or the process of extracting oil from shale rock by injecting fluids into the ground - has revolutionised oil production in the country, transforming US states such as North Dakota and Pennsylvania in the process. |
However, the increase in production has come just as economies across the world - from Europe to China - have slowed their once voracious demand for oil. | However, the increase in production has come just as economies across the world - from Europe to China - have slowed their once voracious demand for oil. |
This, combined with Opec's decision to continue extracting oil at its current pace, has left many investors worried. | This, combined with Opec's decision to continue extracting oil at its current pace, has left many investors worried. |
That has in turn led shares of many of the world's leading energy firms, from BP to Exxon Mobil, to decline sharply over the past few months. | That has in turn led shares of many of the world's leading energy firms, from BP to Exxon Mobil, to decline sharply over the past few months. |
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