The drop follows Friday’s decision by the Organization of the Petroleum Exporting Countries (OPEC) not to cut output despite the supply glut which is depressing prices.
The bank suggested that oil prices could be near 40 USA dollars per barrel, or roughly the current trading price, the bank predicted a worst scenario where prices could hit 20 dollars per barrel.
Crude Oil has fallen this year and USA gasoline demand softened.
Last November, OPEC held a similar meeting and reached a similar conclusion which drove prices down sharply during the subsequent months.
Crude oil prices were flat to modestly higher at the start of trading in NY.
Brent for January settlement fell as much as 68 cents to $40.05 a barrel, the lowest intraday level since February 2009, on the London-based ICE Futures Europe exchange, and traded at $40.14 at 1:35 p.m. London time.
In order to get rid of over-capacity, oil prices will be driven lower to encourage market demand.
The decision by the OPEC oil producers grouping last week to maintain its lofty production levels continues to weigh on a market already awash with supplies as traders fix their sights on other developments that could influence prices.
At the same time crude imports are rising, the preliminary customs figures show China’s exports of refined products surged to 4.1 million tonnes in November, up 68 percent year-on-year.
Oil’s slump has deepened as OPEC extended a fight against USA shale producers amid a surplus estimated by the International Energy Agency at nearly 3 billion barrels.
The group will keep pumping about 31.5 million barrels a day, President Emmanuel Ibe Kachikwu said Friday after a meeting in Vienna.
Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY, said market attention is now turned to a meeting of Federal Reserve policymakers and to the latest economic data from China, the world´s top energy consumer.
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