Brent Oil Falls Below $55 a Barrel for First Time in 5 1/2 Years

Bloomberg reports:

Brent crude oil fell below $55 a barrel for the first time since May 2009 as record supplies from Iraq and Russia bolstered speculation the global glut that drove crude into a bear market will persist.

Futures slid as much as 4.3 percent in London, extending a loss of 5.1 percent last week. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, plans to boost crude exports to a record this month, the Oil Ministry said. Russia’s output rose to a post-Soviet high in December, according to preliminary Energy Ministry data.

“Another day, another record,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said by e-mail. “We are already in the regions of fundamental exuberance to the downside.”

Brent slumped 48 percent last year, the most since the 2008 financial crisis, as OPEC resisted calls to cut output amid a battle with U.S. shale producers for market share. The 12-member group, which supplies about 40 percent of the world’s crude, pumped above its target for a seventh consecutive month in December, according to a Bloomberg News survey.

Look for politicians to raise taxes on gas.