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Oil slides again, hits lowest since April 2009

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Reuters NEW YORK
Last Updated : Jan 09 2015 | 11:35 PM IST

By Barani Krishnan

NEW YORK (Reuters) - Global oil prices resumed their slide on Friday after two days of relative calm, with Brent and U.S. crude hitting their lowest level since April, 2009, on persistent worry over the global supply glut.

Benchmark Brent crude broke below $49 a barrel, drifting further below the $50 support level it had seen earlier in the week. U.S. crude fell below $48.

Oil prices had barely moved in the past two sessions after tumbling 10 percent the first two days of the week. With Brent steady around $50 support since Wednesday, many in the market had thought oil prices would stabilize after a six-month rout.

Some traders and analysts said they saw no catalyst for the fresh liquidation. Others said they saw plenty of incentives to sell, including relatively high U.S. oil production despite the drop in drilling rigs; OPEC's continuing refusal to cut output during the price slide; and technical selling as Brent broke below $49.66.

"People have this almost pathological need to explain everything as it's happening," said Walter Zimmerman, chief technical analyst at United-ICAP.

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"There's no indication yet that this market has bottomed because you've had one quiet day," added Zimmerman, who did not see a new technical trigger for selling until Brent broke below $45 and U.S. crude below $44.

Joseph Posillico, senior vice president of energy futures at Jefferies in New York, concurred that a variety of bearish themes were still pressuring the market lower.

"When people do start talking about where's the floor or how low can we go, most of the people I respect are thinking like $35 or so should be it," he said.

Early in New York trade, crude oil drifted about 50 cents lower as robust U.S. jobs data for December helped limit losses. But the sell-off gained force about an hour before noon, with one trader reporting the sale of more than 2,000 lots in Brent within seconds.

By 12:18 p.m. EST (1718 GMT), Brent was down $1.24 at $49.71 a barrel, after a session low at $48.90.

U.S. crude traded 85 cents lower at $47.94, after falling to $47.16 earlier.

(Additional reporting by Ron Bousso in London and Florence Tan in Singapore; Editing by Michael Urquhart)

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First Published: Jan 09 2015 | 11:28 PM IST

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