Brent crude steadied at around $60 a barrel on Tuesday, under pressure from a supply glut but supported by forecasts of stronger economic data from the U.S. But as David Pollard reports, low prices could be here to stay.
It's hard work being a Russian Santa. These - around 500 of them - limbered up before a fun run. It's all for charity - and cynics would say charity is just what Russia needs. Its economy caught in what's described as a "perfect storm" of sanctions over Ukraine, a flight of investor capital - and plunging oil prices. And they could go down even more. At least, OPEC's biggest producer, Saudi Arabia has made clear it's not going to cut production to push them up. Oil minister Ali al-Naimi quoted as saying that even at $20 a barrel, price was ''irrelevant''. It's not the only downward pressure. FXPro's head of research, Simon Smith. SOUNDBITE (English) SIMON SMITH, HEAD OF RESEARCH, FXPRO, SAYING: ''Personally at the moment I'm on the side that thinks oil is likely to push lower ... The US has tripled oil production in the last year, at a time when Russia is actually falling, but naturally there's a lot of production there which becomes uncompetitive at the 60 (dollar) level. Also look at the demand side in terms oof the global economy.'' The price bulls seize on the latest comments from OPEC delegates. $100 a barrel was often deemed by Saudi Arabia to be a ''fair'' price - and may be off the cards for a long time yet. But while the current price of a around $60 may be the status quo for some months, OPEC sources see $80 as ''achievable'' after that. IG's Chris Beauchamp is among those who see the sell-off decelerating. SOUNDBITE (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "If you look historically at oil returns for the calendar year, the strong period is always the first half of the year. The second half is always very weak. It's particularly weak this year. But it looks as if the industry will pick up into the first half of 2015. And that would drive oil prices higher." Without an oil price rise soon, Russia faces a hard slog ahead. It's been working the other way for Germany's DAX and other European stock markets. Low oil prices have been an early Christmas present - helping boost sentiment. Investors praying they stay rock bottom into the New Year and beyond.