Oil Market Plumbs New Five-Year Lows

Oil struck fresh five-year low points this week on the back of the strong dollar, oversupply fears and major producer Saudi Arabia slashing its export prices.

The market had already dived last week after the Organization of Petroleum Exporting Countries (OPEC) left its output ceiling unchanged, despite a global supply glut.

Crude futures have now slumped by about 40 percent since June, faced also with cheaper oil being extracted from North American shale rock.

Weak economic data has added to the pressure, with worse-than-expected manufacturing figures in China, the world's largest energy consumer.

Commodities were also hit late Friday as the dollar rallied on bright data showing the U.S. economy created 321,000 new jobs in November, some 90,000 more than expectations.

Crude futures sank to fresh five-year lows on Monday, with New York crude hitting $63.72 a barrel -- the lowest level since July 2009.

London Brent oil touched an October 2009 low of $67.53 a barrel, before staging a technical rebound.

"Prices have once again turned lower as concern about the excessive supply continues to weigh," said Forex.com analyst Fawad Razaqzada.

Oil dipped Tuesday after the Iraqi government and autonomous Kurds struck a deal that will boost the nation's crude oil exports to an already oversupplied global market.

Under the deal, due to take effect at the start of 2015, 250,000 barrels per day of oil will be exported from the autonomous region and another 300,000 bpd from the disputed province of Kirkuk.

The agreement could help push OPEC member Iraq's daily output past three million barrels per day, up from around 2.5 million barrels in November.

The oil market diverged Wednesday as traders digested a drop in U.S. crude inventories, which tends to signal strong demand.

However on Thursday and Friday, crude futures hit reverse gear once again, dented by reports that Saudi Arabia has trimmed its export prices and is doing nothing to tighten supplies.

Saudi Arabia is the biggest and most influential member of the 12-nation OPEC cartel.

Reports said Riyadh cut January prices for its crude to Asian and U.S. buyers, as the world's leading exporter defends its market share and, some analysts speculate, seeks to drive high-price producers out of the market.

By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in January sank to $68.36 a barrel compared with $73.05 one week earlier.