Oil prices slump to 5-year low

Brent and West Texas Intermediate fell to a five-year low on Tuesday. Brent for January settlement dropped as much as 86 cents to $65.33 a barrel on the London-based ICE Futures Europe exchange while WTI for January delivery decreased as much as 80 cents, or 1.3 percent, to $62.25 a barrel. OPEC’s biggest members are defending market share and after Saudi Arabia cut prices, Iraq followed.

Saudi Arabia, which led OPEC’s decision to maintain rather than cut output at a November 27 OPEC meeting, last week offered supplies to its Asian customers at the deepest discount in at least 14 years.

Lower fuel prices are compounding the longest commodity price slump in decades. Since energy prices account for as much as half the cost to produce food and metals, all sorts of commodities will keep dropping, such as sugar, corn, copper, metals, pork, cotton and even gold.

Therefore consumers stand to benefit from falling oil prices as consumers can expect to pay less for food.

The post Oil prices slump to 5-year low appeared first on Forex Circles.

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