(MENAFN- Khaleej Times) Brent crude oil rose on Monday to above $71 a barrel, recovering from a five-year low it hit earlier as investors looked for a price floor after last week's Opec decision not to cut production.
US crude and Brent have fallen for five months in a row, oil's longest losing streak since the 2008 financial crisis.
Brent hit a low of $67.53 a barrel, the lowest since October 2009, before rising 85¢ to $71 a barrel by 1454GMT. US crude was up $1.01 at $67.16 a barrel, having slipped to an intraday low of $63.72, the lowest since July 2009.
"The market is still very much in panic mode," said Energy Aspects' chief oil analyst Amrita Sen. "Once we get over the panic, Brent prices will probably stabilise at around $65-$80 a barrel in the short term... we can expect such volatility in the near future given the market had overshot to the downside."
Earlier on Monday, crude oil prices sunk to fresh low points on Monday, dragging down the share prices of energy companies, while miners were hit by weak Chinese manufacturing data, traders said.
"Oil sector stocks have driven the FTSE lower," said market analyst Alastair McCaig from the IG trading group.
Countering the downward trend, shares in German power giant E.ON soared on company's plans to spin off its conventional energy operations and focus on renewables.
Oil futures tumbled to their lowest levels for five years on Monday, extending last week's sharp sell-off in response to the Opec's decision to maintain output despite a supply glut and plunging prices.
US benchmark West Texas Intermediate for delivery in January hit $63.72 a barrel - the lowest level since July 2009. Brent crude for January sank to an October 2009 low of $67.53.
"Investors see crude as remaining vulnerable after last week's Opec announcement," said Michael McCarthy, chief strategist at traders CMC Markets in Sydney.
"We have not yet seen any piece of news or development that could trigger a bottoming-out phase in oil prices," he told AFP.
London's benchmark FTSE 100 index shed 0.97 per cent to stand at 6,657.70 points approaching midday in the British capital. Frankfurt's DAX 30 lost 0.36 per cent to 9,944.79 points and the CAC 40 index in Paris dropped 0.46 per cent to 4,370.07 compared with Friday's close. "General profit-taking after a stellar November and reassessment of the time frame of possible further action by the ECB is putting pressure on stocks," said Markus Huber, senior analyst at broker Peregrine & Black. "There is also more disappointing news out of China," he noted.
The slowdown in Chinese growth, and hence oil demand, has also added to downward pressure on oil prices. Among the biggest fallers were Tullow Oil, which dived 6.41 per cent to 398.7 pence and miner BHP Billiton, that lost three per cent to 1,471.5 pence.
Slumping oil prices are adding to worries about slowing eurozone inflation - a situation that is likely to make the European Central Bank increasingly nervous and pave the way for further monetary easing, according to analysts.
In foreign exchange on Monday, the euro rose to $1.2469 from $1.2443 late in New York on Friday. The European single currency fell to 79.30 British pence from 79.54 pence, while the British pound gained to $1.5720 from $1.5641.
The beleaguered rouble meanwhile hit new record lows as sliding oil prices increased worries about the economy in Russia, a major producer of crude. The Russian currency dropped more than eight per cent during trading on Monday, slumping to 53.29 roubles against the dollar and 66.50 roubles against the euro in afternoon trading on the Moscow Exchange.
On the London Bullion Market, gold slipped to $1,178.75 an ounce from $1,182.75 on Friday.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.