05 May Oil prices drop to five-month lows amid continued market volatility
Global oil prices reached five-month lows in early trading on Friday, while prices of other commodities also fell as worries escalate across the resources sector.
Brent crude dipped to lows of US$47 a barrel, falling from above $50 at the close of play the previous day. Iron ore and copper markets also experienced falls, with the former also set to experience a 5-month low.
The news comes days after oil giants BP (LSE:BP) and Royal Dutch Shell (LSE:RDSA) posted drastically improved profits following a recovery in the global market in recent months.
However, fears remain as to how long it will take to cut back a glut in global supplies, which have been illustrated in the latest slump in oil prices.
Current oversupply has also been exacerbated by the prospect of slowing growth in the US and China.
Ric Spooner, chief market analyst at CMC Markets in Sydney, said: “The commodity optimism of earlier this year looks to be in the process of being completely unwound.
“Last night’s sharp drop in the oil price and further weakness in metals prices will deliver another negative start for [resource stocks] today.”