West Texas Intermediate resumed its fall as Iran predicted a further slump in prices if solidarity falters among the Organization of Petroleum Exporting Countries.
Futures slid as much as 1.2 percent in New York after rising the first time in four days yesterday. Prices may decline to as low as $40 a barrel amid a price war or if divisions emerge in OPEC, said Mohammad Sadegh Memarian, Irans oil ministry head of petroleum market analysis. The 12-member group may need to call an extraordinary meeting in the first quarter if crude continues to drop, according to Energy Aspects Ltd.
Oil is trading in a bear market as Saudi Arabia, which led OPECs decision to maintain rather than cut output at a meeting last month, offers discounts on its crude as it defends market share against U.S. producers pumping at the fastest rate in more than three decades. The Energy Information Administration cut its price forecasts for 2015 amid the slump.
WTI for January delivery fell as much as 78 cents to $63.04 a barrel in electronic trading on the New York Mercantile Exchange and was at $63.14 at 11:18 a.m. in Sydney. The contract increased 77 cents to $63.82 yesterday. Prices are down 36 percent this year.
Brent for January settlement gained 65 cents, or 1 percent, to $66.84 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark crude ended the session at a premium of $3.02 to WTI.
U.S. crude stockpiles expanded by 4.4 million barrels last week, the industry-funded American Petroleum Institute reported yesterday, according to Anthony Headrick, an analyst at CHS Hedging. Government data today may show supplies shrank by 2.7 million, a Bloomberg News survey shows.
Source : Bloomberg