Oil prices fell $1 per barrel in Sydney on Friday, dropping to $58.80 per barrel after dropping $1 earlier in the day.
While the benchmark was already above $60 for the week, this morning’s decline is the first time it has dropped below $60 since last week.
The drop was driven by the continuing price decline in Brent, the world’s main benchmark, which fell to $54.83 a barrel, its lowest level since September.
Brent has fallen by over 60% from a high of $70 a barrel in late July.
Earlier this week, Brent fell $8 per barrel to $56.17.
“The drop in Brent is driven by a large reduction in the level of supply and a weaker dollar, while the US Dollar has weakened to $1,” said Andrew Gee, head of commodity research at IG Markets.
However, a recent rally in oil prices has been offset by concerns over the supply side.
Gee said it was also important to note that, at $60, the Brent decline was still only 1.6% below its $60 low point.
Analysts were expecting Brent to reach $70, the level it reached in early September.
“In our view, the next level of Brent will likely be around $65 per barrel,” said Nick Raskin, head market strategist at IG Securities.
Mr Raskis said that even at $70 Brent was still far below its peak of $115 in mid-2014.
“The current supply and demand dynamics in the global oil market have not been as strong as it should be and so Brent is still at its current level.”
Brent is still trading around $60 and is well below the level reached in mid 2014.
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