Global Oil Prices Sink to A Record Low

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    TEMPO.CO, Jakarta - Global crude oil prices dropped by more than four percent on Tuesday morning, Jakarta time, to trade at record low prices that have not been seen in the past five years, as investors worry about an overabundance of oil reserves amidst a slowing global economy.

    The prices of January contracts for the United States (US) benchmark - the light sweet crude oil or the West Texas Intermediate (WTI) - dipped by US$2,79 to trade at US$63,05 per barrel at the New York Mercantile Exchange, closing at levels last seen in July 2009.

    The prices of January contracts of the European benchmark - Brent North Sea oil - closed at US$66,12 at the end of trading in London, dropping by US$2,88 per barrel to trade at levels last seen in September 2009.

    "Global oil prices are continuing its downtrend as investors begin to realise that market players are not intending to rebalance the overabundance any time soon," said Tim Evans, an analyst from Citi Futures.

    It is known that global oil prices have dropped from a record high posted in June 2014 as China and other developed economies face a slowdown in economic growth - Japan is in the middle of an ongoing recession, economic growth are stalling across the Eurozone. The condition is compounded by the refusal of the Organisation of Petroleum Exporting Countries (OPEC) to put a cap on its aggregate output to stop global oil prices from plunging further.

    Morgan Stanley have said in its report that oil prices will reach its nadir in the second quarter of 2015 unless OPEC producers decide to intervene in the price crisis. The bank have predicted that oil prices will continue to fall until at least the first half of 2015.