The price of oil fell on Monday to a six-month low as supply concerns lessen, fuel stocks remain robust, the Gulf of Mexico has not suffered a repeat of last year’s massively destructive hurricanes and there are signs the world’s largest economy – the United States – is slowing meaning reduced demand for energy.
The price of Brent crude is down by 23% since hitting a record high of $78.40 a barrel in mid-July. That is its biggest decline in over 15 years. Other factors include BP saying it will be able to restart production on a portion of the eastern area of its Prudhoe Bay field in Alaska earlier than expected.
Prudhoe Bay, North America’s largest oilfield, has been partially shut down since August following a leak after which some pipelines were found to be badly corroded. In addition, efforts by the European Union’s top diplomat Javier Solana and others over Iran’s nuclear programme seem to be making progress, easing worries about supply disruptions. Ministers from the OPEC cartel said they have been consulting, but currently have no plans to meet to discuss production cuts.