Oil prices below $80 for first time since 2010

Oil prices below $80 for first time since 2010

PanARMENIAN.Net - Prices for Brent crude, the global oil benchmark, have fallen below the all-important psychological barrier of $80 a barrel for the first time since September 2010, Financial Times reported.

Having spent the day testing the $80 a barrel mark, Brent prices dropped by as much as 2.2 per cent to $79.88 on Wednesday, Nov 12 afternoon.

Meanwhile, WTI prices, the U.S. oil benchmark, are down 1 per cent at $77.18, after falling through the $80 level just last week.

A supply glut, driven in part by U.S. shale and by a resumption in Libyan exports, along with lacklustre oil demand amid ongoing concerns about economic growth in Europe have contributed to the five month decline in oil prices.

In its monthly oil report, OPEC said crude production fell by about 230,000 barrels a day to 30.25m barrels a day in October, compared to 30.48m barrels a day the previous month.

But markets didn't perceive this as a deeper change in policy and instead focused on comments made by Saudi Arabia's oil minister, Ali al-Naimi.

Naimi broke months of silence on Wednesday to speak publicly about the Gulf nation's stance on the oil market. He kept mum on whether Saudi Arabia would cut output to remove surplus oil from the market in response to dramatically lower Brent crude prices. However he dismissed claims that it had triggered a "price war".

"Talk of a price war is a sign of misunderstanding, deliberate or otherwise, and has no basis in reality," Naimi said, according to Reuters. "We do not set the oil price. The market sets the prices."

Michael Loewen, a commodity strategist at TD Securities, said, that oil's decline below the $80 barrel mark was "not hugely significant."

Brent prices are down 30 per cent since their mid-June high. A strong dollar, up 9 per cent in the same period, has also weighed on oil prices.

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