Brent and US WTI crude oil prices fell to their lowest levels in almost six years on Tuesday as a big OPEC producer stood by the group’s decision not to cut output to tackle a glut in the market.

Oil prices have fallen 60 per cent from their June 2014 peaks, driven down by rising production, particularly US shale oil, and weaker-than-expected demand in Europe and Asia.

Rather than cutting output to try to balance the market, producers from the Organization of Petroleum Exporting Countries (OPEC) are offering discounts to customers in an attempt to defend market share.

At 0903 GMT, February Brent crude was down $1.40 at $46.03 a barrel, after dipping as low as $45.23, its lowest since March 2009.

US crude for February delivery was down $1.28 at $44.79 per barrel, off an intra-day low of $44.41.

“The market is in a bit of a panic now and the momentum is really quite negative. We haven’t seen any actions or comments that could reduce this aggressive selling,’’ said Ole Hansen, senior commodity strategist at Saxo Bank.

On the contrary, the United Arab Emirates’ oil minister, Suhail bin Mohammed al-Mazroui, said on Tuesday that OPEC’s November decision not to cut output had been the right one. He also said US shale oil was an important part of global oil supplies.

He added that the market would stabilise at a level at which conventional producers could sell profitably, “whether $60 or $70 or $80’’.

Oil prices have fallen so far that the front-month February contract is now trading about $7 below the July contract, encouraging traders to hire tankers to store oil at sea.

The aim is to buy cheap oil now and sell it at a higher price at a future date, when demand picks up again.

At present, deflationary pressures are beginning to build in both Asian and European economies as demand remains weak.

The downward pressure on prices is so large that even record Chinese crude imports for December, above seven million barrels per day for the first time as the world’s second largest oil consumer took advantage of low prices to build up its strategic reserves, could not lift the market for long.

Banks have slashed their oil price outlook, with analysts at Goldman Sachs cutting their average forecast for Brent in 2015 to $50.40 a barrel from $83.75.

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