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Oil prices slumped further Thursday, with the U.S. crude benchmark settling under $60 a barrel for the first time in more than five years. Hopes for stimulus from global central banks and strong U.S. data initially kept oil above $60, but then sellers showed they aren’t done yet. On the New York Mercantile Exchange, light, sweet crude for delivery in January fell 99 cents, or 1.6%, to settle at $59.95 a barrel. That marked the lowest settlement since July 14, 2009 for a front-month contract. The U.S. oil benchmark has dropped 44% from its June 20 high. January Brent crude slid 56 cents, or 0.9%, to settle at $63.68 a barrel on London’s ICE Futures exchange. The European oil benchmark finished at its lowest level since July 16, 2009. Before the U.S. oil benchmark fell under $60, Flynn said that if crude were to drop below that key level, then $55, $50 and even $40 are possibilities. “The market is showing some stability but not really giving us the sense this thing is all over,” he said.
On Wednesday, the Organization of the Petroleum Exporting Countries announced it sees less demand for its own oil next year. Reporters managing to snag Saudi Oil Minister Ali al-Naimi on the sidelines of an annual U.N. climate-change conference in Lima, Peru, on Wednesday were treated to this quote: “Why should we cut production? Why?” He had been asked whether he thought OPEC would need to cut oil production prior to the cartel’s next meeting in June. Al-Naimi’s comments again underscored Saudi Arabia’s intent to target market share, and not defend prices “in any way,” said Matt Smith, an analyst with Schneider Electric. The comments were a blow to an already weak market.