Bearish outlook as oil hovers at 11-year low

Oil prices slipped towards 11-year lows yesterday as Saudi Arabia’s oil minister made it clear the country had no plans to scale back its output.

Saudi Arabia has no plans to scale back oil production. Picture: Joe Raedle/Getty Images

The comments from Ali al-Naimi added to the already bearish sentiment created by cooling global energy demand and record-high stock levels.

Crude oil prices have slumped by almost two-thirds since the middle of 2014 as high output from Opec, Russia and the United States created a global surplus of between half a million and two million barrels per day.

Yesterday saw Brent crude trading at about $37 per barrel, not far off the lows reached last week as the main supportive influence – an expected cold snap in Europe and the US – was forecast to be short-lived.

Many analysts predict that oil prices are unlikely to push back through $50-60 a barrel any time soon – providing some cheer for motorists but extending the misery for the North Sea sector.