THE PRICE of oil slipped under $100 (£62) a barrel yesterday for the first time since June 2013, with signs of weakening demand amid high supply.
The price of Brent crude oil, the global oil benchmark, fell as low as $99.36 a barrel during trading yesterday, the lowest level since May 2013.
The oil price drop came as oil demand prospects were hit yesterday by Chinese import data, showing a 2.4 per cent drop in imports in August, unexpectedly continuing on from a 1.6 per cent drop in imports in July.
The further drop in oil yesterday follows a one per cent fall in the oil price last Friday, after poor US jobs data showed only 142,000 new jobs created in August, the lowest level this year, also fuelling demand concerns.
Malcolm Graham-Wood, analyst at Hydrocarbon Capital, told City A.M. yesterday that he has been bearish on the oil price in recent months, with an oversupply in the market having developed.
He added “There is plenty of oil in the market, with strong supply from Saudi Arabia, as well as more from Iraq and Libya, while on the demand side if you look at Europe other than the UK most economies are clearly not powering up.”
Oil had surged earlier this summer to over $115 in mid June, the highest level this year, on concerns from conflicts including ISIS in Iraq, but with production relatively unaffected and fighting more contained the oil price has dropped 13 per cent since then.