LONDON (APP) – World oil prices dived Friday close to a seven-year low, propelled downward by global oversupply and the strong dollar after this week’s US interest rate hike.

In late morning London deals, US benchmark West Texas Intermediate for delivery in January tumbled to $34.41 a barrel — the lowest since February 18, 2009.

The contract later stood in midday trade at $34.48, down 47 cents from Thursday’s closing level.

Crude futures have been further plagued by oversupply woes ever since the OPEC oil cartel left its output ceiling unchanged on December 4, despite a market collapse that has ravaged its members’ revenues.
“This justified fear of an oil glut is continually causing new lows,” said analyst Connor Campbell at trading firm Spreadex. Also on Friday, Brent North Sea crude for February delivery was 22 cents lower at $36.84.

The January Brent contract had plunged on Monday to $36.33 per barrel, last witnessed on December 24, 2008. The contract then expired on Wednesday.

This week, Brent has traded dangerously close to its lowest point in almost 11 years.

The market has been pummelled as producers including OPEC continue pumping despite depressed prices and anaemic global demand — as cartel members look to maintain market share by pushing aside non-OPEC members.

“Oil appears likely to remain quite volatile into the end of the year,” said Oanda trading group analyst Craig Erlam.
“A break of $36.20 would see Brent trading at its lowest levels since July 2004 and could prompt a move back towards $33-34.”