OIL AT 11-YEAR LOW

Oscar Williams-Grut

Dec 21, 2015, 13:23 IST

Roman Piekarski adjusts the hands on one of the clocks at Cuckoo Land, his cuckoo clock museum, near Knutsford in northern England, March 27, 2009. The museum has started the two-day task of turning its 600 clocks forward by one hour in preparation for the arrival of British Summer Time this weekend.

Turning back the clock to 2004.

Oil still hasn't found the bottom.

Brent crude broke through the symbolic 7-year low mark of $36.20 (£24.29) in overnight trade on Monday to touch an 11-year low of $36.18 (£24.27) a barrel, down 1.9% from Friday's close.

It initially pulled back but now, in early trade in London, it's even lower - down 1.36% at $35.16 (£23.59) at 7.50 a.m. GMT (2.50 a.m. GMT).

West Texas crude oil, the US measure of oil prices, is also getting crushed. Crude is currently down $0.41, or 0.93%, at $35.66 (£23.93).

Prices keep falling because of one simple reason - the market is saturated with oil right now. OPEC is pumping out cheap oil in a big to strangle the US's nascent shale oil boom by making production prohibitively expensive for many operators.

But, as CLSA's Christopher Wood pointed out in a note over the weekend, the efforts have so far had relatively little effect. US crude production has fallen by just 4.5% since its peak in June, even while oil prices have fallen by over 40%.

CLSA is predicting we'll get to $20 (£13.40) oil. We certainly haven't found the bottom yet.