Wednesday, January 7, 2015
The price of Brent crude oil has fallen below $50 a barrel for the first time since May 2009, amid signs of slowing economic growth. The major benchmark briefly touched $49.92 a barrel in early trading on Wednesday before edging higher later in the day.
As well as a weakening global economy, increased supply has also helped push prices lower in recent weeks. North American producers have continued to increase output of shale oil and gas, while the Organization of the Petroleum Exporting Countries (OPEC) has resisted calls for a cut in production to support prices.
The oil price has now fallen by more than 50% since June. This reduction will be welcomed by businesses and the general public, but will pose a significant challenge for oil producing countries such as Russia and Venezuela which rely on the oil price to balance their budgets.
Iain Armstrong, oil market analyst at investment management firm Brewin Dolphin said: "Unless you're lucky enough to be tied to the dollar, your currency is going to be in big trouble."