Oil falls to its lowest in nearly six years

13-Jan-15

Brent fell by over 5%, to settle at US$47.4, its third-largest one-day decline since 2011 and its lowest close since March 2009, while US crude fell to US$46. Oil prices fell 5% to its lowest in nearly six years, extending the second-deepest rout on record, after Goldman Sachs warned that prices would fall further and Gulf oil producers showed no sign of cutting output, as per Reuters. An unusual spate of major refinery glitches across the U.S. East and Midwest added to the concerns, threatening to accelerate a build up of surplus crude. Four U.S. refineries with a combined capacity of more than 1 mln bpd were recovering from disruptions at the weekend caused by either cold weather or unexplained fires. Three were restarting on Monday, while the fourth, in Lima, Ohio, was expected to be offline for a week. Goldman slashed its three month forecasts for Brent to US$42 a barrel from US$80, and reduced its outlook for the US futures contract to US$41 from US$70.