After a brief recovery oil resumed its downward slide on Thursday with the price of US crude falling below $60 a barrel for the first time in five years. The decline came as market participants digested the latest supply and demand forecasts and continued to digest the fallout from Opec’s recent decision not to cut production.

Nymex January West Texas Intermediate, the US oil benchmark, surrendered early gains to trade down $1.27 a $59.64 late in the session on Thursday, while ICE January Brent, the international crude marker, also headed south, falling 69 cents to $63.55 a barrel.

Heaping more pressure on oil prices were data from the US Energy Information Administration that showed an increase in crude stocks even though refiners were producing at record levels.

The declaration from Saudi Arabia’s oil minister that the country had no intention of changing its stance and cutting production, in defence of higher prices, also pushed the price of oil lower.

“Why should I cut production?” said Ali Al-Naimi at a conference in Lima. “This is a market and I’m selling in a market. Why should I cut?”

At the meeting of Opec members last month, Saudi Arabia — the cartel’s leader and top producer — and its Gulf allies resisted calls from their poorer peers to cut production in order to balance the market.

Sustained output from the oil producing group has coincided with relentless production from the US and a weak consumption picture.

The decision to stick to its 30m barrels a day output target has sent the price of oil spiralling lower — it is almost 45 per cent below its mid-June level of $115 a barrel.

“If the price is going to move anywhere, its going to go down,” said Michael Wittner, analyst at Société Générale.

“[Wednesday’s] news flow underscores the key theme that has emerged from recent weeks which is that prices will balance the market. US stats were bearish, Opec trimmed its demand forecasts and Naimi reinforced his message,” he said.

Mr Wittner said oil market analysts would be watching announcements from international oil companies to see how they respond to lower prices at the same time as keeping track of data on investment, production and rig counts.

“We’ve started to see how some of the big oil companies are responding to a lower oil price environment. It’s only a matter of time for the smaller companies,” he added.

Opec said in its monthly report that demand for its crude is estimated to stand at 28.92m barrels a day in 2015, which would be the weakest level since 2004 according to historical data. This is a downward revision of about 300,000 b/d from previous estimates. The figures indicate there will be a surplus of 1.13m b/d in 2015, and 1.83m b/d in the first half.

The cartel expects non-Opec supply to rise more than expected next year, while global demand forecasts were lowered from initial levels.

Laura El-Katiri, a research fellow at Oxford Institute for Energy Studies, said it was important not to overreact the latest data from the producers’ group.

“Like with all market outlooks, we face much uncertainty over how accurate our assumptions over demand but also supply next year will be. If non-Opec supply, particularly from US shale oil production, proves more responsive to the current price environment than currently expected, the balance could shift back towards a higher call on Opec,” she said.

“The same applies if there were any further delays in planned production growth in non-Opec producers, or new, unplanned production shut-ins inside or outside Opec. The second half of 2015 will prove to be particularly interesting,” she added.