By Nicole Friedman And Georgi Kantchev
Oil prices tumbled for a fourth straight session, extending this year's steep losses fueled by a persistent surplus
of crude supplies.
The spate of declines has sent the benchmark price for U.S. oil 48% lower in the past six months, underscoring how
investors and traders see few signs of pullback in production big enough to stabilize the market.
"The sellers are still in charge, and it seems like the market really hasn't bottomed," said Gene McGillian, senior
analyst at Tradition Energy.
Oil for January delivery fell $1.90, or 3.3%, to close at $55.91 a barrel, the lowest level since May 2009 on the
New York Mercantile Exchange.
Brent crude, the global benchmark, slid 1.3% to $61.06 a barrel, the lowest level since July 2009, on ICE Futures
Europe.
Prices had risen earlier in Monday's session after armed clashes in Libya over the weekend disrupted oil exports. A
quadrupling of Libya's oil output in a matter of months earlier this year is a major factor behind the global supply
glut that has weighed on prices. But some previous disruptions to Libyan shipments were quickly resolved. Any
interruption would have to be sustained to set even a temporary floor under prices, analysts said.
"The market gave, basically, an over-the-shoulder glance [to the Libya news] and left it in the rearview mirror,"
said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Oil has a lot of moving pieces moving
against it right now."
In addition to Libya's supplies, the U.S. is pumping oil at the fastest rate in almost 30 years. These barrels are
hitting the market in an environment of sluggish demand growth. On Friday, the International Energy Agency slashed its
forecast for demand growth in 2015 for the fifth time in six months.
And the Organization of the Petroleum Exporting Countries is signaling that it's holding fast to its November
decision to maintain its production target. Nymex crude plummeted 10% on the day after the last OPEC meeting, which fell
on the U.S. Thanksgiving holiday.
The United Arab Emirates' oil minister said Monday that OPEC won't call an emergency meeting unless something "
drastic" happens, without elaborating. The cartel's next scheduled meeting is in June.
The head of OPEC, Abdalla Salem el-Badri, said Sunday that the group hasn't set a target for the oil price, and
analysts said he appeared to imply the organization would tolerate much lower prices.
"No target price," said Mr. Badri, speaking at an event in Dubai.
The price basket of 12 OPEC crudes fell below $60 a barrel Friday for the first time since July 2009. The majority
of OPEC members need prices at $100 a barrel or above to balance their government budgets.
Falling oil prices have hurt the currencies of oil-producing nations, including Russia and Nigeria, and weighed on
energy stocks and junk-bond prices.
Relatively cheap oil is expected to boost global economic growth next year, as consumers will save money on
petroleum products and be able to spend more elsewhere.
Market watchers this week will be looking at data on the health of the major global economies to gauge whether
sluggish demand will continue into 2015. The U.S., China and Europe are scheduled to release manufacturing data on
Tuesday.
The U.S. Federal Reserve will meet this week, with a monetary-policy statement due on Wednesday after the meeting.
"The market will be looking for news to see whether we have found a bottom," said Tamas Varga, analyst at PVM. "We
are probably not just there yet, but we are close."
While many traders dismiss the potential impact of the latest Libya outage, a prolonged interruption could lead to
tighter supplies of high-quality oil coveted by refiners.
Libya told customers it might not be able to meet contractual obligations for crude deliveries from two key ports,
a top oil official told The Wall Street Journal on Sunday, as armed clashes disrupted about half of the country's crude
export capacity. Samir Kamal, head of planning at Libya's state-run National Oil Co., said oil flows from fields
supplying the terminals have been interrupted.
The two ports typically ship 560,000 barrels a day combined. The two terminals reopened this summer after a one-
year interruption.
January reformulated gasoline blendstock, or RBOB, fell 2.09 cents, or 1.3%, to $1.5764 a gallon.
January diesel slipped 1.43 cents, or 0.7%, to $2.0017 a gallon.
Benoît Faucon, Summer Said, Asa Fitch and Nicolas Parasie contributed to this article.
Write to Georgi Kantchev at georgi.kantchev@wsj.com and Nicole Friedman at nicole.friedman@wsj.com
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(END) Dow Jones Newswires
12-15-141649ET
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