Oil extended losses
below $40 a barrel amid speculation a record global glut will be
prolonged as OPEC abandoned its long-time strategy of limiting
production to control prices.
Futures dropped as
much as 1.9 percent in New York after falling 4.2 percent last week. The
Organization of Petroleum Exporting Countries will keep pumping about
31.5 million barrels a day, President Emmanuel Ibe Kachikwu said Friday
after a meeting in Vienna. The group is setting aside its output quota
of 30 million barrels a day, a target breached the past 18 months, until
members gather again in June.
Oil has slumped about
40 percent since Saudi Arabia led OPEC’s decision in November 2014 to
maintain output and defend market share against higher-cost shale
producers. After Friday’s OPEC decision, “everyone does whatever they
want,” Iranian Oil Minister Bijan Namdar Zanganeh said. Iran is seeking
to increase crude exports next year when international sanctions over
its nuclear program are removed.
West Texas
Intermediate for January delivery declined as much as 77 cents to $39.20
a barrel on the New York Mercantile Exchange and was at $39.53 at 8:48
a.m. Hong Kong time. The contract decreased $1.11 to $39.97 on Friday.
The volume of all futures traded was almost three times the 100-day
average. Prices are down 26 percent this year.
Brent for January
settlement slid as much as 25 cents, or 0.6 percent, to $42.75 a barrel
on the London-based ICE Futures Europe exchange. The European benchmark
crude was at a premium of $3.26 to WTI.
Source: Bloomberg
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