NEW YORK, Jan. 12 (UPI) -- Dim prospects for oil prices pushed key indices into negative territory Monday, with Brent and WTI both off more than 3 percent from the previous session.
The price for Brent, the global oil price index, was off nearly 3.25 percent from the previous session to trade near $48.50 for the February contract, the lowest price in roughly five years and the second time this year the price fell below the $50 mark.
Oil prices since June have lost more than 50 percent of their value as supplies outweigh demand in a weakened global marketplace. Decisions from Saudi Arabia, the tacit leader of the Organization of Petroleum Exporting Countries, to keep its output steady despite oversupplies are helping drive the price of oil downward.
Speaking with veteran investment journalist Maria Bartiromo, writing for USA Today, Saudi billionaire Prince Alwaleed bin Talal said he was doubtful that oil prices would rally above the $100 per barrel mark any time soon.
Goldman Sachs sparked further pessimism in the crude oil market by trimming its six month prediction for Brent from $70 to $43 per barrel.
While the low price of oil has been a source of de facto stimulus for consumers paying less for energy products like gasoline, the climate is negative for oil producing countries that depend heavily on export revenue.
Several international oil companies have cut their spending plans for 2015 and now, secondary businesses like pipe makers and rig builders are pulling back because of deteriorating market conditions.
Shell Chief Executive Officer Ben van Beurden said some financial flexibility will be needed to steer the company through current market conditions.
The price for West Texas Intermediate, the U.S. index, was off more than 3.25 percent from the previous session to $48.36 per barrel early Monday. Goldman cut its six month prediction for WTI from $65 to $39 per barrel.
