Oil prices plummet to 5.5-year lows; stocks rise

Oil prices slumped today to fresh 5.5-year lows under USD 49 per barrel, hurting the energy sector, but European stock markets pushed higher on eurozone stimulus hopes.

Brent crude for February delivery collapsed to USD 48.45 -- the lowest since late April 2009 -- and US benchmark West Texas Intermediate (WTI) for February hit a similar trough at USD 47.06 a barrel.

The latest heavy falls were sparked by worries over the ongoing global crude supply glut, and came after US investment bank Goldman Sachs cut its price outlook.

"Oil was once more was the recipient of dismal data as Goldman Sachs downgraded its forecasts for the commodity, from an average price of USD 83 per barrel in 2015 to USD 50," said Spreadex analyst Connor Campbell.

"Brent crude greeted this news by dropping to new five-and-a-half-year lows; the confirmation of a bleak future for the commodity will see these prices linger for a long time yet."

Global oil prices have more than halved since June, dented also by demand jitters arising from the faltering world economy.

European equities were however buoyed Monday by persistent hopes of quantitative easing (QE) stimulus from the European Central Bank, dealers said.

In early afternoon deals, London's benchmark FTSE 100 index added 0.28 per cent to 6,519.30 points, Frankfurt's DAX 30 won 1.41 per cent to 9,784.70 points and the CAC 40 in Paris climbed 1.39 per cent to 4,237.10.

Market expectations are growing that ECB chief Mario Draghi could decide to implement QE, or bond-buying, in order to combat deflation in the 19-nation eurozone.

"Some form of quantitative easing (QE) is clearly on the table," noted economist Neil MacKinnon at Russian financial services group VTB Capital.

Draghi had stated earlier this month that the ECB could launch a QE programme of purchasing government bonds to protect the eurozone from deflation.