13 October 2014, News Wires – Brent oil prices sank Monday to another four-year low on abundant supplies and demand concerns arising from the weak outlook for global economic growth.
The market also slid as Iraq became the latest OPEC crude exporter to cut its prices after similar moves by Saudi Arabia and Iran, according to analysts.
Brent North Sea crude for delivery in November dived to $88.03 a barrel in Asian trading hours, touching the lowest level since December 1, 2010.
In midday London deals, the contract stood at $88.21, down $2 from Friday’s closing level.
US benchmark West Texas Intermediate (WTI) for November delivery lost $1.38 to $84.44 per barrel. It had slumped on Friday to $83.59, last seen on July 3, 2012.
“Oil prices remain on the defensive as the new week of trading begins,” said Commerzbank analysts in a research note to clients.
The global oil market is also tumbling because of plentiful supplies of crude oil.
However, the Organization of the Petroleum Exporting Countries (OPEC) — whose nations pump a third of global oil — has not yet reacted to slumping crude futures.
“OPEC is still giving no indication that it might take steps to shore up prices,” added Commerzbank analysts.
“On the contrary, Iraq is now the third important OPEC member to significantly lower its sales prices as compared with the international benchmarks.
“OPEC countries appear to be more interested in defending their market shares at present than stabilizing prices.”
However, Kuwaiti Oil Minister Ali al-Omair said Sunday that he expects falling prices to recover in winter — but OPEC was unlikely to counter the slide in the short term.
“We expect (oil prices) to increase in the winter season or at least preserve its current level,” said Omair, cited by the official KUNA news agency.
The minister also said he believes that oil will not drop below $76-77 a barrel, which is the production cost in Russia and the United States.
The decline was expected due to geopolitical factors, a rise in supplies and negative forecasts for global economic growth, according to Omair.
He said Kuwait has not received any invitation for an emergency OPEC meeting to discuss prices but would attend if the call came up.
However, Venezuela will request an emergency meeting of OPEC countries to try to halt sliding oil prices, Foreign Minister Rafael Ramirez had insisted on Friday.
“We are going to ask for an extraordinary OPEC meeting,” said Ramirez, who is the nation’s former oil minister and ex-head of the public oil company PDVSA.
“We need to try to coordinate some sort of action to stop falling oil prices,” he added.