World oil prices slid another 4 percent to new five-year lows on Monday, as expectations of a deeper slump next year and a prediction by a core OPEC member that crude will remain at $65 for several months triggered another round of selling.
U.S. crude oil settled 4.2 percent lower at $63.05 per barrel, at a new five-year low, its third worst drop of of the year. Brent crude for
January fell was last down 4 percent at $66 a barrel, after slipping to
a session low of $65.93—its lowest since October 2009.
The chief executive of Kuwait's national oil company said oil
prices were likely to remain around $65 a barrel for the next six to
seven months, the latest indication that Gulf producers were content to
ride out the latest rout.
The pessimistic outlook deepened the decline in a market that many traders now see as having little chance of rebounding.
"When these things go lower, they tend to go much
farther than people anticipated," said Tariq Zahir at Tyche Capital. "I
definitely think we're going to keep heading lower, everyone is trying
to pick a bottom."
Late on Friday, Morgan Stanley
set a new bar for bearishness on Wall Street, slashing its average 2015
Brent base-case outlook by $28 to $70 per barrel and warning that
prices could drop as low as $43 a barrel next year.
"Without OPEC intervention, markets risk becoming
unbalanced, with peak oversupply likely in the second quarter of 2015,"
Morgan Stanley analyst Adam Longson said.
Thus far, there appears little sign of
intervention, even after oil prices dropped 15 percent, or nearly $12 a
barrel, since the Organization of the Petroleum Exporting Countries
opted not to cut production at its Nov. 27 meeting.
Top exporter Saudi Arabia has resisted calls from poorer members to
curb output and shore up prices which have slumped more than 40 percent
Libya's state oil company said on Sunday the
country was producing 800,000 barrels a day, though its El Sharara
oilfield was closed due to a pipeline blockade.
It is unclear how soon the price slump will slow
the U.S. shale boom. While the number of onshore rigs drilling for crude
oil remains relatively high, companies are making deeper cuts to
spending for next year. On Monday, Conoco said it would slash spending
by 20 percent, or $3 billion, the biggest reduction thus far announced
by U.S. drillers.