Oil
dropped after Saudi Arabia, the world’s biggest crude exporter, said
low prices won’t reduce its spending on energy projects and China’s
diesel demand fell for a fourth consecutive month.
Futures
tumbled 5.8 percent in New York. Saudi Arabian Oil Co., also known as
Saudi Aramco, is maintaining its investment plans despite the rout in
the crude market, Chairman Khalid Al-Falih said Monday. Diesel use in
China dropped 5.6 percent in December compared with a year earlier and
gasoline consumption grew at the slowest pace in more than two years.
Oil
resumed its decline after the biggest two-day rally in more than seven
years as concerns persist over ample U.S. stockpiles, steady production
from Saudi Arabia and Russia and the outlook for increasing Iranian
shipments after the end of sanctions. Prices may take as long as three
years to normalize, according to Bank of Montreal Chief Executive
Officer William Downe.
West
Texas Intermediate for March delivery dropped $1.85 to close at $30.34 a
barrel on the New York Mercantile Exchange. Total volume traded was 28
percent higher than the 100-day averageat 2:57 p.m. Front-month prices
rose 21 percent over two sessions at the close Friday after the February
contract expired Wednesday at $26.55 a barrel, the lowest since 2003.
Brent
for March settlement fell $1.68, or 5.2 percent, to end the session at
$30.50 a barrel on the London-based ICE Futures Europe exchange. The
contract gained 10 percent to $32.18 Friday. The European benchmark
crude closed at a 16-cent premium to WTI.
Source: Bloomberg
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