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Oman crude oil prices on the Dubai Mercantile Exchange tumbled to under $50/b for the first time in more than 5 years, as the 2014 oil price collapse continued into the new year.
Front-month January DME Oman futures contract closed at $49.39/b (12:30 Dubai time), down $2.65 on the previous close and the lowest closing price since May 2009, with almost 4,000,000 barrels traded during the 5-minute window.
Prices peaked last June above $111/b but have now fallen by around $62/b, including almost $30/b since late November when OPEC members decided not to cut production at their meeting in Vienna.
DME Oman is now around 55% down from last summer's peak, drawing comparisons with the price collapse of 2008. In the 2008 reversal, which was triggered by the global credit crunch, Oman crude fell from around $140/b to under $35/b, or around 75%, but prices quickly recovered in 2009.
Christopher Fix, Chief Executive of DME, said: : "Oil demand is notoriously inelastic so despite a price reversal of more than 50% we have yet to see an upswing in demand. There is still too much oil in the market, but markets always find a way of rebalancing."
