BEIJING: Brent crude continued its march downwards on Friday, dropping to a 5-1/2-year low of $63 a barrel for a weekly loss of more than 8 percent, amid persistent concerns over a global supply glut and a bearish demand outlook.
The Organization of Petroleum Exporting Countries (OPEC), which accounts for a third of global oil output, cut its 2015 demand forecast this week, to the lowest in more than a decade.
"The recent bout of weakness has been a function of the concerns shifting a little bit more to the demand side now," said Mark Keenan, head of commodities research in Asia for Societe Generale in Singapore. "There has been perhaps a little bit of neglect of what the demand profile's going to be like next year."
Brent slipped 12 cents to trade at $63.56 by 0724 GMT, after touching $63.00, the lowest since July 2009. Brent traded above $115 in June. US crude was down 53 cents at $59.41, after falling more than a dollar to a low of $58.80, also the weakest since July 2009.
The contract has lost about 10 percent this week.
Top energy consumer China released data on Friday showing near-record refinery runs in November, with factory output growth weaker than expected.
High Chinese oil demand, which has remained above 10 million barrels per day for the past three months, could help provide a floor to crude prices that have plunged around 40 percent since June.
Remarks by Saudi Arabia's oil minister reiterating that the kingdom will not cut output, and a surprise jump in US crude and distillate inventories, have driven down oil prices this week. OPEC exporters are locked in a battle for market share. Kuwait has set the official selling price for crude sales to Asian buyers for January at $3.95 a barrel below the average of Oman/Dubai quotes, a trader said, its lowest since Dec. 2008.
The market outlook is uncertain, with some traders speculating that other OPEC members, such as Algeria and Venezuela, may convince the group to hold an emergency meeting early next year.
Yet others doubt that Saudi Arabia would agree to production cuts even if such a meeting were held.
"We continue to believe that the reversal for an uptrend is not in sight," Daniel Ang of Phillip Futures said in a note.
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