The price of oil has fallen to fresh five-year lows in the wake of two separate reports indicating a global supply glut.
Opec oil producers released a forecast indicating less global oil demand next year. A separate US report, which showed a surprise increase in the country’s crude oil supplies, also pushed prices lower. The price of Brent crude has fallen 43% since mid-June.
The influential oil commentator Jorge Montepeque at price assessor Platts said the price could fall further.
“There are a certain amount of people that think the mid-to-long term [price] is the mid-60’s,” he told the BBC.
“That means prices could fall further before they reach their balance. I think we could see some spikes or troughs that are a little bit deeper. But over time we could end up around $50 or $60 [a barrel].
In its report, Opec said that it expected demand for its crude oil to fall to 28.9m barrels per day next year, which is near ten-year lows.
Opec’s official production target is 30m barrels per day, meaning significantly more oil would be on the market than was demanded.
In a separate note, the US Energy Department said there was a surprise increase in US crude stockpiles last week of 1.5m barrels. Analysts had been predicting a decline of 2.2m barrels. That increase has led to declining prices for petrol, jet fuel, and heating oil.
The decline in oil prices has hurt the share price of several large firms, from Exxon Mobil to BP, but helped businesses such as airlines where cheap oil prices can help buoy profits.