New York (AFP) – Oil prices fell to fresh six-year lows in New York trade Monday despite a warning from OPEC that prices could surge to $200 owing to a shrinking investment in exploration.
But prices were volatile in a market skittish about the election of a new leftist, anti-austerity government in Greece and a rocket attack on the Ukraine city of Mariupol blamed on pro-Russia rebels.
US benchmark West Texas Intermediate for March delivery lost 44 cents at $45.15 a barrel compared with Friday’s close.
In London, Brent North Sea crude for delivery in March slipped 63 cents to $48.16 a barrel.
According to reports, OPEC Secretary General Abdullah El-Badri warned that the pullback in oil exploration and production investment since prices fell by nearly 60 percent since June could result in curtailed output several years in the future, forcing prices to $200 a barrel.
But he put no timeline on that warning, and analysts said there was little sign yet that that would be the case.
“We’d view that as a bullish case hypothetical scenario at this point,” said Tim Evans of Citi Futures.
“Particularly given the shorter lead times for shale-oil investment, we think there would be quite a bit of supply available at significantly lower levels.”
Greece’s election of the Syriza party to power ensured more trouble for the eurozone and the country’s dealings with creditors.
The attack on Mariupol, which sits between Russia and Russia-occupied Crimea, could result in tougher Western sanctions on Moscow.
“It means more turmoil and less demand for oil,” said Phil Flynn of PRICE Futures Group.