Crude oil price crash continues with new five-year low amid growing global glut

The Philadelphia Energy Solutions petroleum refinery in Philadelphia, Pennsylvania. Crude oil prices have just sunk to a fresh five-year low, as strong United States production exacerbates a global glut of the commodity. -- PHOTO: REUTERS 
The Philadelphia Energy Solutions petroleum refinery in Philadelphia, Pennsylvania. Crude oil prices have just sunk to a fresh five-year low, as strong United States production exacerbates a global glut of the commodity. -- PHOTO: REUTERS 

Crude oil prices have just sunk to a fresh five-year low, as strong United States production exacerbates a global glut of the commodity.

Futures trading in West Texas intermediate, a widely-used crude benchmark, slid 1.3 per cent to US$62.25 a barrel in New York trading, Bloomberg reported.

That is the lowest level since July 2009 - and the latest dip in the six-month nose-dive of the price of crude oil.

As recently as the middle of last year, crude was trading well above US$100 a barrel.

One key factor in the latest slide was a decision on Nov 27 by the oil-producing cartel of nations, Opec, led by Saudi Arabia, to maintain production levels.

Some observers had expected Opec to reduce production to help support prices.

At the same time, US production has surged to its fastest level in three decades, adding to a global oversupply of the commodity.

The slump in oil prices is good news for motorists, and lower prices gradually trickle through to the bowser - but it's bad news for energy-related stocks for example.