Oil prices tumble 4% to fresh five-year lows

New York - Global oil prices tumbled more than 4% on Monday to fresh five-year lows on mounting oversupply worries as global economic growth slows.

The main US futures contract, West Texas Intermediate for delivery in January, dived $2.79, settling at $63.05 a barrel on the New York Mercantile Exchange, its lowest close since late July 2009.

The European benchmark, Brent North Sea for January delivery, closed at $66.19 a barrel in London trade, its lowest close since September 2009, shedding $2.88.

Both contracts tanked 4.2%.

"Global petroleum markets are extending their price downtrend on a broadening recognition that there will be no quick rebalancing of the physical market," said Tim Evans of Citi Futures.

Oil prices have slid precipitously from their 2014 peaks in June on slowing growth in China and emerging-market economies, a recession in Japan and a near-stall in the eurozone. Opec's recent decision to keep output unchanged despite ample global supplies has further weighed on the market.

On Monday, traders weighed disappointing data from China, the world's largest energy consumer and second-biggest economy, and Japan.

China's export growth slowed sharply in November and imports surprisingly contracted, pushing the nation's trade surplus to a record $54.47bn.

"The weak exports data strengthened market expectations for policy easing" by Beijing, Central China Securities analyst Zhang Gang told AFP.

Japan's recession was deeper than previously estimated, with the government revising the third-quarter contraction to 0.5% from 0.4%.

"Demand is hardly likely to grow sufficiently in the short term for the massive oversupply that looms in the first and second quarter of next year to be absorbed," said Commerzbank analysts in a market note.

Investment bank Morgan Stanley, in a research note on the crude oil outlook projected that the market oversupply situation will peak in the second quarter of 2015 without Opec intervention to tighten output.

The bank predicted prices would still fall through the first half of the year.

"The market may find balance as early as (the second half) through demand stimulation, slower US production growth and/or an outage," it said.