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Brent crude oil falls to new five-year low | Brent crude oil falls to new five-year low |
(about 4 hours later) | |
The price of Brent crude oil has fallen to a new five-and-a-half year low of $51.12 per barrel, its lowest level since March 2009. | |
It follows Monday's 6% plunge in prices. | |
The fall appeared to have been prompted by Saudi Arabia cutting prices to Europe. | |
At the same time, the kingdom, Opec's largest oil-producing nation, raised them for Asian customers. | At the same time, the kingdom, Opec's largest oil-producing nation, raised them for Asian customers. |
Some analysts said the price cuts reflected Saudi Arabia's deepening desire to defend its market share in Europe. | Some analysts said the price cuts reflected Saudi Arabia's deepening desire to defend its market share in Europe. |
US oil fell further on Tuesday to $48.01, having fallen below the symbolic threshold of $50 a barrel for the first time since April 2009 on Monday. | |
The prices of both Brent crude and US oil, known as West Texas Intermediate crude, have now fallen by more than 50% since mid-2014. | The prices of both Brent crude and US oil, known as West Texas Intermediate crude, have now fallen by more than 50% since mid-2014. |
Investors are worried that a combination of global oversupply and weak oil demand could cause prices to tumble further. | Investors are worried that a combination of global oversupply and weak oil 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 demand for oil in economies across the world from Europe to China - the world's second-largest consumer of oil - has slowed. | However, the increase in production has come just as demand for oil in economies across the world from Europe to China - the world's second-largest consumer of oil - has slowed. |
Recent data also showed that Russia's 2014 oil output hit a post-Soviet era high and exports from Iraq, Opec's second-largest producer, reached their highest since 1980. | Recent data also showed that Russia's 2014 oil output hit a post-Soviet era high and exports from Iraq, Opec's second-largest producer, reached their highest since 1980. |