Oil Hits 5-1/2-Year Low

Oil Hits 5-1/2-Year LowOil Hits 5-1/2-Year Low

Brent crude oil fell to a five-and-a-half-year low of less than $57 a barrel on Tuesday as a global supply glut outweighed concerns of lost supply from Libya where battling militias have closed ports, Reuters reported.

The North Sea oil benchmark recovered some ground later but was on track for its weakest month since the global financial crisis of 2008, and traders said the sell-off that has halved crude prices in six months showed no sign of coming to an end.

Brent fell $1.14 a barrel to $56.74, its lowest since May 2009. US crude CLc1 fell 20 cents to $53.41 after hitting $52.70 - also its lowest since May 2009.

Oil markets have been heavily oversupplied this year due to increasing output of high quality, light oil from US shale and lower-than-expected consumption as a result of faltering global economic growth and competition from alternative fuels.

Organization of the Petroleum Exporting Countries (OPEC), which pumps a third of the world's oil, had been expected to trim output to try to stabilize prices, but it decided in November to keep production unchanged and let the market find its own level.

  Venezuela Oil at $48

Venezuela's petroleum export basket, which includes crude oil and refined products, has fallen to $48, Reuters quoted President Nicolas Maduro as saying.

The South American OPEC member's basket trades at a discount to other benchmarks because of its higher content of heavy oil. Average monthly prices have dropped steadily since July, when the basket was at $96.14 per barrel. Venezuela enjoyed average prices of $103.42 per barrel in 2012 and $98.08 in 2013.

Maduro repeated his socialist government's accusations that this year's plunge in global oil prices was a US-led conspiracy aimed primarily at harming Russia. "Did you know there's an oil war? And the war has an objective: to destroy Russia," Maduro said in a speech to state businessmen carried live on state TV.

"It's a strategically planned war ... also aimed at Venezuela, to try and destroy our revolution and cause an economic collapse."Venezuela derives 96 percent of its export revenues from oil and has suffered an economic slowdown in 2014.

  Libyan Output Shrinks

Libya's oil output has shrunk further after blazing oil tanks at a major terminal helped push world oil prices higher and put a strain on the country's dollar currency reserves.

Libya is surviving on a mere 128,000 barrels per day (bpd) from fields connected to the eastern port of Hariga, an oil official said, while fighting halted the major ports Es Sider and Ras Lanuf.

Total oil output, adding offshore fields and Brega output, is about 350,000 bpd - a fraction of the 1.6 million bpd it produced before the 2011 civil war. Some oil is keeping two refineries going, and the official was unable to say how much, if any, was available for export.

Oil tanks at Es Sider have been on fire for days after a rocket hit one of them, destroying more than two days of Libyan production. Libya has appealed to Italy, Germany and the United States to send firefighters.