Crude oil prices fell to a five-year low Monday with analysts blaming expectations of more bad news for demand due to slower economic conditions.
US crude benchmark West Texas Intermediate for February delivery lost $1.12 to finish at $53.61 a barrel after holding in the $56 range for nearly two weeks.
Brent crude for February delivery, the London benchmark, fell 57 cents from Friday’s close to $57.88.
Both last traded at those levels in May 2009.
Analysts said traders were girding for more downward pressure stirred up by the impact of Greece’s political situation on the European economy, expected poor numbers on China’s industrial sector, and another possible increase in US stockpiles.
“It’s a very bearish environment out there,” said John Kilduff of Again Capital.
Prices were stronger in early trade Monday on signs that Libyan output could be cut back due to storage tanks fires amid clashes between government and militia forces, but that had little lasting impact on the market, noted Kilduff.
Bob Yawger of Mizuho Securities said there were other short-term causes for the fall, including US storage tank operators trying to lower their holdings for end-of-year tax reasons.