Oil fell as Iraq said it needs to boost crude output and exports to compensate for collapsing prices, exacerbating a global supply glut.

Futures declined as much as 1 percent in New York. Iraq has lost about 50 percent of its revenues because of the price decrease, Rowsch Nuri Shaways, the deputy prime minister of OPEC™s second-biggest producer, said in Davos, Switzerland. U.S. crude supplies probably expanded a second week through Jan. 16, according to a Bloomberg News survey before a report from the Energy Information Administration on Thursday.

Oil slumped almost 50 percent last year as the U.S. pumped crude at the fastest rate in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to cut output. Prices will rebound rather than extend their decline to as low as $20 a barrel, according to Abdalla El-Badri, the secretary-general of the 12-member OPEC.

West Texas Intermediate for March delivery fell as much as 47 cents to $47.31 a barrel on the New York Mercantile Exchange and was at $47.39 at 10:46 a.m. Sydney time. The contract gained $1.31 to $47.78 on Wednesday. The volume of all futures traded was about 77 percent below the 100-day average.

Brent for March settlement rose $1.04, or 2.2 percent, to $49.03 a barrel on the London-based ICE Futures Europe exchange on Jan. 21. The European benchmark crude ended the session at a premium of $1.25 to WTI.

Source : Bloomberg