Bloomberg.com reporters Mark Shenk and Grant Smith are reporting today that oil fell below $35 a barrel in New York for the first time since 2009 as Iran reiterated its pledge to boost crude exports, bolstering speculation that rising OPEC production will deepen the global glut.
Futures fell as much as 3.1 percent to $34.53 a barrel in New York, the lowest since Feb. 18, 2009. Prices lost almost 11 percent last week, the biggest drop in a year. There’s “absolutely no chance” Iran will delay its plan to increase shipments even as prices decline, said Amir Hossein Zamaninia, the nation’s deputy oil minister for international and commerce affairs. Speculators in the U.S. have raised bearish bets to an all-time high. Diesel and gasoline futures led declines as warm U.S. weather curbed heating fuel demand.
Oil slumped last week to levels last seen during the global financial crisis, while speculators increased bets on falling U.S. crude prices to an all-time high after the Organization of Petroleum Exporting Countries this month effectively abandoned production limits. The supply glut will persist at least until late 2016 as demand growth slows and OPEC shows “renewed determination” to maximize output, according to the International Energy Agency.
WTI for January delivery fell 15 cents, or 0.4 percent, to $35.47 a barrel at 10:05 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 66 percent above the 100-day average. The aggregate volume of monthly WTI contracts climbed to a record of 1.596 million on the Nymex on Dec. 8. Each contract corresponds to 1,000 barrels of oil.
Brent for January settlement dropped 89 cents, or 2.4 percent, to $37.04 a barrel on the London-based ICE Futures Europe exchange. It touched $36.33, the lowest since Dec. 26, 2008. The European benchmark crude was at a $1.57 premium to WTI.
In the U.S., Senate negotiators are nearing a deal to allow unfettered crude oil exports for the first time in 40 years, though differences remain on renewable-energy tax credits that Democrats are demanding in return, according to people close to the discussions.