NEW YORK Crude oil prices lost more than 2 percent on Tuesday, extending a relentless selloff to trade within cents of $30 a barrel for the first time in 12 years on concerns about fragile Chinese demand and the absence of restraint in global production.
Shaking off early firmness, crude extended a nearly 7 percent drop from Monday. Losses for the year of almost 17 percent have been driven by too much supply, the weakening economy of No. 2 consumer China, sliding stock markets, and a strong dollar, which makes it more expensive for those using other currencies to buy oil.
Analysts from some major banks have cut their 2016 oil forecasts to as low as $10 per barrel.
Benchmark Brent crude fell to a low of $30.43 per barrel, a level not traded at since April 2004. It was at $30.65, down 90 cents, at 11:43 a.m. EDT (1643 GMT).
U.S. West Texas Intermediate crude(WTI) fell to a low of $30.10, which was last seen in December 2003, and last fetched $30.26, down $1.15.
Crude firmed in early trade after a deadly suicide bombing rocked central Istanbul. Traders said support also came after Nigeria's oil minister commented that a "couple" of Organization of the Petroleum Exporting Countries (OPEC) members had requested an emergency meeting.
But buying faded after the United Arab Emirates oil minister said that the current OPEC strategy was working. Instead, traders chose to focus on the growing global glut.
"The market is so relaxed with the fact that we have a huge surplus. The momentum is too strong to the bearish side, even if fundamentally nothing has changed." said Dominick Chirichella, a senior partner at Energy Management Institute.
Adding to supply fears, Iraq, the second-biggest OPEC producer, plans to export a record of around 3.63 million barrels per day in February, said trade sources.
China's slowing economy has weighed on oil, which has shed more than 70 percent of its value in the last 18 months.
(Additional reporting by Simon Falush in London, Henning Gloystein in Singapore and Aaron Sheldrick in Tokyo; editing by Jason Neely and Alden Bentley)
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Updated Date: Jan 13, 2016 00:00:14 IST