Worries about surplus oil supplies were fuelled by data showing that output in Russia hit a post-Soviet-era high in 2014 and exports from Iraq, OPEC’s second-largest producer, were the highest since 1980. Jitters over political uncertainty in Greece drove investors out of risk assets globally to safe-haven bonds.
“It’s building on the recent bearish supply/demand outlook of oil, led originally by the OPEC meeting,” said Mark Keenan, who heads Asia commodities research at Societe Generale.
Brent crude LCOc1 touched a fresh low since May 2009 at $52.28 a barrel at one point today.
Some economists expect cheaper oil to boost consumers’ purchasing power and buoy the global economy, but the 50 percent plunge in oil prices since June has also raised deflationary fears.
“This is great news for motorists, but it presents a headache for policy makers, with the Fed keen to get their policy settings back to something more normal, and Europe keen to avoid a deflationary spiral,” ANZ analysts said in a note.