Zee Media Bureau
Oil prices hit fresh five-and-a-half-year lows on Wednesday as global business growth slowed to its weakest level in a year and analysts said a building supply glut meant that more falls were likely before a rebound.
Benchmark Brent crude futures fell to USD 49.92 a barrel, their lowest level since May 2009, before edging back to USD 50.09 a barrel.
The pace of global business growth eased to its weakest rate in over a year at the end of 2014 as rates of expansion slowed in both the manufacturing and service industries, according to JPMorgan`s Global All-Industry Output Index, produced with Markit.
US futures dropped to USD 47.08 a barrel before recovering to USD 47.25.
The low prices are a result of high output clashing with sluggish demand, especially in Europe, which is still struggling with its debt crisis, and in Asia, where China`s growth is slowing and Japan is battling recession.
On the demand side, output from North American shale producers remains high, although drilling is slowing, and producer club OPEC has so far resisted calls to cut production in support of prices.
Instead, it is trying to defend its market share through offering low prices.
With agency inputs
