Bearish outlook as oil hovers at 11-year low

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

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.

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.