Oil prices slip below $50 barrel on record output

Brent crude oil prices fell below $50 a barrel yesterday, after the global economic outlook darkened and Iraq announced record oil production.

The world’s biggest energy consumer, China, faces significant downward pressure on its economy, its premier Li Keqiang was quoted as saying yesterday.

China is expected this week to report growth slowing to 7.2% from a year ago, the weakest since the depths of the last global economic crisis. Data from China’s National Bureau of Statistics showed on Sunday house prices fell for a fourth straight month.

Brent crude traded at $49.42 a barrel yesterday afternoon, down 75 cents. US crude was down 84 cents at $47.85 a barrel.

Oil prices have dropped by more than half since last June as output around the world soared while demand growth slowed. Although the International Energy Agency (IEA) said last week a reversal in the trend was possible this year, it added that prices may fall further before rising.

“There’s still more supply than demand and that’s a situation that will not change in just a few weeks,” said Hans van Cleef, energy economist at ABN Amro.

Iraq pumped four million barrels per day (bpd) of oil in December, Oil Minister Adel Abdel Mehdi said, its highest ever thanks to higher output from its southern terminals and a surge in supply from the north.

Iran’s oil minister said yesterday consultations with other OPEC members to stop oil prices falling had yet to bear fruit, but Tehran had no plans to call an emergency OPEC meeting to discuss prices.

Zanganeh said Iran could live with even lower prices.

“Even if the oil price goes down to $25 a barrel, the oil industry will not be threatened,” the Fars news agency quoted Zanganeh as saying.

Analysts said prices found some support from a drop in US drilling rigs, signifying a likely fall in production in the future. But they said there was not much room for gains


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