Brent crude oil prices hit historic low in more than 11 years on Monday as a result of a continue increase in global supply which are expect to outpace demand again next year.
In London market, futures fell as much as 2.3 percent after a 2.8 percent drop last week. Producers are focusing on reducing costs to further reduce the price. While consumers have enjoyed lower fuel prices, the world's largest oil exporters have been forced to reconsider their overall strategy.
According to Analysts, there is little to restrain continued oil price declines in the near term. Prices are down about 15 percent so far in December, after an OPEC meeting failed to produce measures to restrain record-high production. That meeting was quickly followed by the United Nations climate accord in Paris, which aims to reduce the world’s reliance on oil and other carbon-emitting fuels.
Analysts say that Saudi Arabia’s strategy of keeping production high to maintain market share and weaken higher-cost producers is showing some signs of working. For instance, the International Energy Agency, the Paris-based monitoring organization, forecasts that supplies from outside of OPEC will decline next year.
Brent crude prices have dropped by nearly 19 percent this month, their steepest fall since the financial crisis in October 2008.
U.S. crude futures were down 26 cents this morning at $34.47 a barrel, their lowest since 2009.
Investment bank Goldman Sachs believes oil price could drop to as little as $20 a barrel.