AKIPRESS.COM - Oil prices extended their slump into the new week by falling to fresh 5 ½ year lows after Greece’s elections added to uncertainty in Europe, reports Wall Street Journal.

Crude has fallen more than 55% since last June as ample supply met tepid demand for the commodity, particularly in Europe.

Brent crude for March delivery fell 1% to $48.31 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, WTI futures traded at $45.12 a barrel, down $0.45 from Friday’s settlement.

The radical antiausterity Syriza party won Sunday’s vote and raised the specter of uncertainty in Europe. The euro hovered around multiyear lows exerting pressure over dollar-denominated commodities like oil.

“Yesterday’s Greek elections are likely to heighten volatility across all asset classes,” JBC Energy said in a note.

Nymex WTI crude lost 7.2% last week, settling at its lowest value since March 11, 2009. The contract has been down for 15 of the past 17 weeks. Brent crude, the global benchmark, lost around 2.8% last week.

Analysts expect more pain for oil markets as there is little evidence of a change in supply and demand fundamentals.

Saudi Arabia didn’t signal a change in its policy despite a change in leadership last week. The new King Salman is expected to continue to resist cutting the country’s crude output—and that of the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the most influential member — to defend its market share against the booming U.S. shale industry.

“There is still more downside risk to oil prices, notably as U.S. oil supply continues to grows unabated in the first half of the year and that OPEC maintains the status quo on its production policy,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas . “As we transition from Q1 to Q2, that is when the down side risk to oil prices is the greatest as demand seasonally weakens with the end of winter and U.S. refinery maintenance gets under way, cutting into crude oil demand.”

Shale oil players could still be viable at an oil price of as low as $30, Morgan Stanley said. But the bank cautioned that lower prices should limit cash flow and spending and restrict access to capital for oil producers.

“However, when prices rebound, U.S. shale producers will be able to respond in 3-6 months,” it said in its January energy outlook report.

Nymex reformulated gasoline blendstock for February—the benchmark gasoline contract—fell 1.75% to $1.3241 a gallon, while ICE gas oil for February changed hands at $471.00 a metric ton, down $6.00 from Friday’s settlement.