WTI Drops Below $50 per Barrel to Lowest Point in 5 1/2 years

A global supply glut has sent oil prices plummeting since last September. 

West Texas Intermediate (WTI) today slid below $50 per barrel for the first time in five-and-a-half years amid a continued supply glut that has no end in sight, Bloomberg reports. 

During Monday trading on the New York Mercantile Exchange (NYMEX) WTI prices for February delivery fell as low as $49.77 before closing the day at $50.04.

Meanwhile, its counterpart, Brent Crude, has fallen below $55 per barrel. 

“Everyone is looking for the bottom,” said Sarah Emerson, managing principal of consultancy firm ESAI Energy Inc.

Russian oil production has also shown no signs of stopping, rising 0.3 percent in December, while Iraq plans to report record exports this month with 3.3 million barrels per day. 

Analysts also tipped West Africa and the Americas to add to the supply glut in the coming year.

“We’ve already dropped below what would be justified by fundamentals," said Emerson.

"Brent should find support around the $58 to $60 area given supply and demand.”

Adding to the fears is recent speculation that Greece may be abandoning the euro, which has led the U.S. dollar to gain. 

A rising dollar has in the past typically turned investor's interests away from commodities. 

“There’s a very strong correlation between dollar strength and oil prices," said Stephen Schork, president of the Schork Group Inc.

"The dollar is very strong right now.”

The Organization of the Petroleum Exporting Countries (OPEC) late last year cut demand projections to its lowest point in 12 years shortly after its announcement to maintain its production ceiling sent oil prices tumbling.