Crude oil has hit a 12-year low as the world’s supply glut shows no signs of easing despite increased global tensions. Brent crude dropped to $34.95 a barrel — the lowest since 2004 — as traders bet against the black stuff again ahead of another big expected rise in US stockpiles. Crude has just seen the biggest two-year loss on record after the Opec oil cartel effectively abandoned production limits.
Saudi Arabia is determined to keep pumping oil and maintain market share despite the rise of US fracking. Iran coming back into the international fold is also likely to boost supplies. Prices are falling despite New Year tensions between Saudi Arabia and Iran over the Saudis’ execution of a prominent Shia Muslim cleric. Elsewhere, communist North Korea successfully tested a hydrogen bomb last night.