Crude oil prices drop to their lowest in nearly six years

Crude oil prices continued trading lower on 13 January, to their lowest in almost six years, despite China reporting record crude imports.

Brent February contract was trading 3.92% lower to $45.57 a barrel at 0727 GMT.

US February contract was trading 2.91% lower to $44.73 a barrel.

Both benchmarks are at their weakest since early 2009.

Crude shipments into China, the world's second-largest economy, for December 2014 rose above seven million barrels a day for the first time, Reuters reported.

2015 outlook

Banks the world over have slashed their 2015 oil price outlook in the wake of a supply glut and slowing global demand.

Goldman Sachs cut its average forecast for Brent this year to $50.40 a barrel from $83.75. It lowered its outlook for US crude to $47.15 a barrel from $73.75.

Australia's Macquarie bank said it expected Brent to hover around $50-60 per barrel in the first-half of 2015, and then to rally to $85 per barrel in late-2015 as "global oil supply-demand balances tighten".

Dutch bank ABN Amro forecast an average Brent price of $60 per barrel and $55 for WTI crude.

Singapore-based Phillip Futures said in a note: "Oversupply and weak demand still plagues the oil market. These fundamental factors ... will continue to push it down if [they] do not change."

Eurozone impact

Capital Economics said in a note: "The recent sharp drop in both the price of crude oil and the value of the euro should have some positive effect on euro-zone economic output. We think that, on balance, the peripheral countries should benefit more than the region's core. But the threat of deflation and their lack of openness will prevent their economic outlooks from being transformed."

Energy analysts at Wood Mackenzie, in a note, said only 1.6% of global oil supplies will suffer losses if Brent crude prices dropped to $40 (£26.50) a barrel, but even that level will not necessarily trigger shutdowns.

At $40 a barrel, around 1.5 million barrels per day (bpd) will turn cash-negative, located mostly in oil sands projects in Canada, Wood Mackenzie said after analysing 2,222 oil fields which account for the majority of global production.

US shale oil production starts to become cash-negative once Brent prices fall into the high $30s a barrel, Wood Mackenzie added.