Gene McGillian, senior analyst at Tradition Energy in Stamford, cT expains: "It proves that the price retracement wehad on the captial expenditure cuts and falling rig counts may have been premature".
Several energy firms has slashed billions of dollars from their oil exploration budgets after crude prices fell to half their June peaks.
Brent Oil LCOc1 fell below the $55-a barrel-support, settling down $1.77, or 3 percent, at $54.66. US crude cLc1 closed down $1.17, or about 2 percent, at $48.84
According to investment bank Goldman Sachs, one of the oil market's most influential voices, reiterated its view that lower prices were needed over the coming quarters to force a slowdown in the US crude.
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