Oil prices slide to their lowest levels in six and half years on new data showing a surprise rise in US petroleum inventories. European benchmark Brent crude lost $1.65 to $47.16 a barrel. US benchmark West Texas Intermediate fell $1.82 to $40.80. The world has not seen such price levels since the 2009 credit crunch. Despite the weak market, Saudi Arabia boosted its exports. OPEC’s biggest producer is pumping oil at full capacity, leading to a glut in the market. The country exported 7.36 million barrels per day in June, up from 6.93 bpd in May. Saudi Arabia is desperate for new petrodollars amid a budget deficit which is ballooning due to the country’s costly war in Yemen and airstrikes in Syria as well as its lavish spending.
The new slump in prices came after new data showed US crude stocks had risen 2.6 million barrels to 456.1 million barrels. The rise in US inventories was unexpected since oil supplies typically fall in the spring and summer because refiners process more gasoline to meet driving demand. Market watchers are expecting further price slumps with the end of the summer driving season. "As we go into the next couple of months, crude oil demand is going to decline, which worries the market," Andy Lipow, head of Houston consultancy Lipow Oil Associates, told AFP. "I don't necessarily expect it to go below $40 for a long period of time, but it certainly is poised to do that," he added. Expectations of more weak environment left shares of the world's biggest oil companies battered, with Exxon Mobil, BP, Marathon Oil, Chevron and ConocoPhillips all sliding to their lowest levels in several years.