Crude oil, products pressured by OPEC decision despite China imports

For the first time since early 2009, U.S. crude fell below $37 (34 euros) on Tuesday, dropping more than $1 from its last settlement on Monday.

"We believe that the current crude oversupply in the global market will persist over the coming years, reinforcing our flat outlook for oil prices over 2015-2017", BMI Research said in a market commentary.

US premium crude prices plunged almost 6 percent to $37.65 in NY and Brent crude fell to $40.73 in London, dragging down global stock prices and the currencies of oil-producing countries like Russian Federation and Iran.

Oil prices continued sliding Tuesday, hitting fresh seven-year lows, with Brent, the global benchmark, in danger of falling below $40 a barrel.

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Brent futures fell $1.96 to $41.05, after sliding to$40.95, their lowest since March 2009.

The price of oil has not made much of an impact on the world's economy as the USA is only starting to recover from the recession while a number of other economies are now experiencing a slowdown, including China.

However a strong dollar, weakening demand, soaring supplies, and expectations of a USA rate rise kept investors wary of further weakness.

"What is worrying me is not the price of today; it is what is happening in the industry", chief executive Claudio Descalzi said in an interview with Bloomberg TV.

Market watchers will now be looking towards the release of official figures from the Energy Information Administration at 3.30pm which will shed more light on the extent of the glut. The Organization of Petroleum Exporting Countries failed to agree to production curbs at a December 4 meeting, instead setting aside its quota of 30 million barrels a day until members gather again in June. For the majority of this year, OPEC production has eclipsed the ceiling by more than 1 million bpd in an apparent effort to squeeze out higher-cost USA shale producers. With a history of exceeding its production rates, which were previously at 30 million barrels and are now at 31.5 million barrels, OPEC is not to be trusted.

"As China continues to support the expansion of its (independent) "teapot" refineries, allowing more imports of crude oil, we expect this pattern (of high product exports) to continue", ANZ said.