Brent crude prices fell to their lowest in more than 11 years on Monday, hounded by a relentless rise in global supply. As Sonia Legg reports, supply also looks set to outpace demand next year too.
It's one of the few cites where you might get a white Christmas - but not this year. Like many places Moscow is enjoying relatively tropical temperatures. And weak consumer demand isn't helping the oil glut. Brent crude prices fell 2 percent on Monday to just over $36 a barrel - their lowest in more than 11 years. But still production remains close to record highs. World First's Jeremy Cook (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "Certain members of OPEC have said if it gets down to 35 dollars a barrel it could trigger an emergency meeting but certainly the dynamics of the oil markets, the fiscal over supply that we are seeing, the critical under demand that we are seeing from emerging markets does not show any sign of being unsustainable in the short term." Many producers have hacked spending and jobs and exporting nations - like Russia - have seen revenues tumble. There's an economic crisis in Nigeria, all out recession in Venezuela. And Azerbaijan's ditched its currency peg after burning through more than half its foreign exchange reserves. Iraq too has devalued its currency Even the Saudi's are implementing budget cuts. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "The Saudis are one of the few country's who can sustain prices at this kind of level but it's the wider OPEC community - people like Russia, Indonesia and Mexico who have real issues with oil at this price." And there's worse to come. U.S. oil supply will make its way to global markets next year after the government lifted a 40-year restriction on crude exports. A peace deal could lead to higher exports in Libya and Iran will resume shipments after the lifting of international sanctions.