Oil hits new 5.5-year lows as Saudis defend stance

US benchmark West Texas Intermediate for February tanked $2.29 to $47.75 a barrel, a low last witnessed in late April 2009 (AFP Photo/Mohammed Huwais)

New York (AFP) - Oil prices tumbled Tuesday to fresh 5.5-year lows as Saudi Arabia blamed weak global economic growth and said it will stick to its guns on production policy.

US benchmark West Texas Intermediate for delivery in February sank $2.11 to $47.93 a barrel, a low last witnessed in late April 2009.

Brent North Sea crude for delivery in February dived $2.01 to $51.10 per barrel, the lowest level since early May 2009.

"The market is still worried that there are no signs that the supply glut will start falling," Nordea Markets analyst Thina Margrethe Saltvedt told AFP.

James Williams of WTRG said the weakness in the market could take prices below $40 a barrel.

"Basically, there are continuing concerns about OPEC not cutting back, particularly Saudi Arabia, and US production continuing to grow," he said.

Saudi Arabia's Crown Prince Salman, in a speech on behalf of ailing King Abdullah Tuesday, said weak growth was to blame for the price fall, which has sliced deeply into the income of the world's largest exporter.

"This development is not new in the oil market, and the kingdom has in the past dealt with it firmly and wisely," he said, adding that Saudi Arabia will maintain its "same approach" towards the market.

That appeared to confirm Riyadh's determination to defend its market share rather than reduce output, even if that pushes prices lower.

On Monday Saudi Arabia reportedly cut its European and US export prices in order to maintain market share.

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