By JAMES MUYANWA –
THE prices of oil on the international market fell to five-year low last week, crossing the $60-per-barrel mark as local motorists and other stakeholders remain optimistic of another reduction in fuel pump prices.
Zambia’s Energy Regulation Board (ERB) has so far reduced the local pump prices of petroleum products twice due to the free-fall of the wholesale prices of crude oil on the international market.
According to the international media the prices sank to $58 per barrel on Friday, extending the previous day’s record drop to below $60.
Crude oil markets fell by three per cent or more to record new five-year lows on Friday.
Reuters reports that the price for the benchmark Brent oil went below $62 a barrel while the price for the United States crude sagged to under $58.
Falling crude inventories in the US coupled with the top oil exporter Saudi Arabia’s insistence not to cut production dampen the market leading to low prices against information indicating a strong US economic recovery.
Other international media report that the trigger for Friday’s tumble was a new report from the International Energy Agency on the outlook for the world market in 2015.
The Paris-based organisation cut its forecast for demand growth next year by 230,000 barrels a day to 900,000 barrels meaning that globally only an average of 93.3 million barrels per day will be used, up from 92.4 million this year.
Brent LCO settled down by $1.83, or nearly three per cent, at $61.85 per barrel on Friday falling to $61.35 during the session, the lowest since July 2009.
US crude CL finished down by $2.14, or 3.6 per cent, at $57.81 after earlier dropping to $57.34, its lowest since May 2009.
On the week, Brent lost more than $7, or about 11 per cent while US crude tumbled over $8, or 12 per cent.
Both markets have lost about 46 per cent of their value since their June highs, when Brent stood at above $115 and US crude at around $107.
The ERB announced the second reduction of fuel prices last week, with petrol going down to K9.89 from ?K10.38, representing a reduction of K0.49 while diesel is now costing K9.19 from K9.73 with a reduction of K0.54.