The price of oil has dropped below $50 in New York trading for the first time since December as concerns that Opec’s output cuts are failing to restrain record US stockpiles triggered the biggest slump in more than a year.

Oil rose to an 18-month high as output cuts by Kuwait and Oman signalled that Opec and its partners are delivering on their accord to stabilise the market.

Oil climbed as Iraq’s oil minister said it pledged to co-operate with the Organization of the Petroleum Exporting Countries (Opec) to reach an agreement this week that’s acceptable to all members.

Oil’s rally will stall at $55 a barrel as US shale drillers get back to work and a “wall of supply” from investments made over the past decade hits the market, says Goldman Sachs Group.

Crude oil prices advanced, extending the longest winning streak in more than a year, as US crude and petrol inventories declined.

The price of crude slipped following the failed Turkey coup as shipments continued through the vital conduit for oil from Russia and Iraq to the Mediterranean Sea.

British explorer Europa Oil and Gas has said the current oil price environment is not hampering its efforts to find development partners for assets it holds in Ireland and elsewhere.

Oil declined after an official report showed US crude inventories advanced to an 86-year high.

Amid the plunge in oil prices, Saudi Arabia expects to post a budget deficit of 367 billion riyals (€89.1bn) and Russia’s economy teeters on the brink of a deeper recession, while Iran wants to swiftly boost its oil exports, it emerged yesterday.

Oil deepened its weekly decline as Goldman Sachs Group said a global supply surplus could force prices to $20 a barrel. Futures fell after two weeks of gains. Goldman said yesterday the world’s oil glut is even bigger than it thought.

Oil traded near the lowest level in more than six years yesterday as an unexpected rise in US crude stockpiles exacerbated a global glut.

OIL rose to the highest level in more than a week in New York, climbing with equities on optimism that the economy willexpand and a report that US consumer spending gained in July.