US oil prices fall to fresh six-year low

Gulf countries, led by top OPEC producer Saudi Arabia, refuse to cut production unless the oil-producing states that are not members of the group agree to do the same (AFP Photo/Yasser al-Zayyat)

New York (AFP) - Oil prices skidded to a fresh six-year low Thursday amid worries about excess supply.

US benchmark West Texas Intermediate for September delivery dropped $1.07 to $42.23 a barrel on the New York Mercantile Exchange, the lowest level since March 2009.

European benchmark Brent oil for September delivery shed 44 cents at $49.22 a barrel in London.

The oil market has had an up and down week, with worries about the Chinese economy rising after Beijing surprised markets by devaluing the yuan.

"The market continues to reel under very weak fundamentals," said Gene McGillian, broker and analyst at Tradition Energy.

McGillian said there is a "potential for a further slide" in oil prices but strengthening US demand for petroleum products could help guard the market from further falls.

US gasoline supplies dropped by 1.3 million barrels in the week ending August 6, according to the Department of Energy.

"Obviously demand in the US is holding up fairly well and this is bullish," said James Williams, market analyst at WTRG.

"But when you start looking at the rest of the world, and you put all the numbers together, we're oversupplied by two to three a day million barrels per day, and that's a hard number to support in any market."

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