Oil slumps to five-year low as OPEC decision spurs forecast cuts
LONDON. KAZINFORM Brent crude slumped to a five-year low as OPEC's decision last month to maintain output at a time of oversupply prompted a growing number of banks to cut price forecasts. West Texas Intermediate also slumped.
Futures dropped as much as 2.5 percent in London and 1.9 percent in New York. Morgan Stanley lowered its 2015 estimate by 29 percent in a report on Dec. 5, citing a decision by the Organization of Petroleum Exporting Countries not to lower a 30 million-barrel-a-day output target. Banks including BNP Paribas SA, Credit Suisse Group AG, UBS Group AG and Barclays Plc have also cut since the 12-nation group's Nov. 27 meeting, Bloomberg reports. "The major forecasters continue to cut price expectations, especially for the first two quarters of 2015," Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail. He forecasts Brent may drop as low as $60 a barrel within the next several months, a slump of about 11 percent from current prices.