Brent oil cratered to its lowest price in more than 11 years on Monday and remained locked within a narrow range, burdened by warmer-than-normal temperatures and a market lacking clear signals. Heating oil futures weighed down the crude complex, hitting a new July 2004 low as seasonal demand has failed to materialise due to warmer-than-expected temperatures. Across the board, markets remained locked in a holding pattern.
"The market is waiting for the next announcement," said Tyche Capital Advisors senior research analyst John Macaluso. "The equity markets are waiting on crude oil, and crude oil is waiting for a bounce before shorts will come back into the market." Crude short-sellers will be reluctant to return before US crude recovers to $35.50, he said. The market, which has been plagued this year by an oversupply of crude oil and weakening demand, is continuing to face pressure going into 2016.
"It seems the bearish fundamentals continue to drive prices lower," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut. Global oil production is running close to record highs and, with more barrels poised to enter the market from nations such as Iran and Libya, the price of crude is set for its largest monthly percentage decline in seven years. Brent's premium over US crude narrowed further after President Barack Obama signed a law on Friday that will lift a 40-year ban on US crude oil exports.
US crude futures were down 20 cents at $34.53 a barrel by 1:46 pm EST (1846 GMT) after bouncing off an intraday low of $33.98. Brent futures were down 56 cents at $36.32, falling as much as 2 percent during the session to a low of $36.04, their weakest since July 2004. Brent has dropped nearly 19 percent this month, its steepest fall since the collapse of failed US bank Lehman Brothers in October 2008. While consumers have enjoyed lower fuel prices, the world's richest oil exporters have been forced to revalue their currencies, sell off assets and even issue debt for the first time in years as they struggle to repair their finances.