**Oil Prices Tumble to Fresh Lows **
*Ample Supplies, Tepid Demand Have Prompted Plunge in Oil Prices *
Oil prices sank to more-than-five-year lows Monday on fresh signs that supply will outstrip demand in the coming months.
U.S. oil prices briefly fell below $50 a barrel for the first time since April 2009, and Brent, the global benchmark, crashed through the $55-a-barrel mark.
Ample oil production, particularly in the U.S., and tepid demand growth have sent oil prices plunging in recent months. Consumers are reaping the benefits, while oil-exporting nations are struggling to balance their fiscal budgets and oil companies are seeing their stock prices slump.
Production has showed no sign of slowing despite spending cutbacks by many oil companies. Prices slid Friday on reports that Russian oil output hit post-Soviet records and Iraqi oil exports were at their highest since the 1980s.
Trading volumes have been light due to the holidays, making price moves more volatile, said Ray Carbone, president of Paramount Options and a Nymex floor trader. He said traders were using options to benefit from dramatic price moves, including a potential drop to $25 a barrel.
“It’s certainly a different world,” he said. “We’re quoting [prices] that, really, we haven’t seen for a long time, since 2008-2009.”
To try and gain a perspective how volatile oil prices have been I created a spreadsheet to get the avg. prices of Brent Crude Oil (using US$) per barrel (from IndexMundi data portal) for 5 year spans since 1985.
5 YEAR span ------ PRICE
1/1985-12/1989 — $18.88
1/1990-12/1994 — $19.19
1/1995-12/1999 — $17.41
1/2000-12/2004 — $28.97
1/2005-12/2009 — $70.41
1/2010-12/2014 — $102.08
Today I saw brent crude price at $53.11.
The huge jump in price in 2005 makes it difficult to gauge what price is reasonable per barrel? $53.11 may look reasonable to one forecasting such in 2004?