Oil extended losses below $60 a barrel amid speculation that OPEC’s biggest members will defend market share against US shale producers.
Brent also slid after closing at the lowest price since July 2009. West Texas Intermediate futures fell as much as 1.9 per cent in New York and are down 10 per cent this week.
Iraq, the second- largest producer in the Organisation of Petroleum Exporting Countries, said its decision to widen a discount for January sales to Asia isn’t proof of a price war.
Oil is headed for the 10th weekly drop since October after OPEC decided against reducing its output, even as the highest US production in more than three decades exacerbates a global glut.
Saudi Arabia, Iraq and Kuwait, the group’s three biggest members, this month widened discounts on shipments to Asia, bolstering speculation that they’re fighting for market share.
“It’s clear that as far as the Saudi price war is concerned, there’s no sign of retreat, so it looks like oil prices will continue to fall,” Phil Flynn, a senior market analyst at Price Futures Group in Chicago, said by e-mail.
“Now that $60 has fallen, the next support is $58.” WTI for January delivery dropped as much as $1.15 to $58.80 a barrel in electronic trading on the New York Mercantile Exchange and was at $59.28 at 3 pm Singapore time.
The contract lost 99 cents to $59.95 yesterday, the lowest close since July 2009. Total volume was about 70 per cent above the 100-day average. Prices have decreased 40 per cent this year.
