(Reuters) - Brent crude oil prices fell below $49 a barrel and U.S. crude also fell more than $1 on Monday 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 by state radio as saying on Monday.
China is expected this week to report growth slowing to 7.2 percent 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 settled at $48.84 a barrel, down $1.33. U.S. benchmark crude was last trading down $1.17 at $47.52 a barrel.
Trading volumes were thin and there was no official settle for U.S. crude as U.S. markets were closed for the Martin Luther King Jr. Day holiday.
Oil prices have dropped by more than half since 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 noted 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 a record 4 million barrels per day (bpd) of oil in December, Oil Minister Adel Abdel Mehdi said on Sunday, as output rose from its southern terminals and supply from the north surged.
Iran’s oil minister Bijan Zanganeh said on Monday consultations with other members of producer group OPEC to stop oil prices falling had yet to bear fruit, but Tehran had no plans to call an emergency meeting to discuss 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.
Prices found some support from a drop in U.S. drilling rigs, signifying a likely fall in future production. In a note to clients, Commerzbank analysts said latest figures from oilfield services company Baker Hughes showed the rig count hit its lowest level since October 2013.
“Shale oil production is likely to follow suit after a certain delay. This does nothing to change the considerable oversupply in the short term, however,” Commerzbank said.
Additional reporting by Henning Gloystein in Singapore and Himanshu Ojha in London; Editing by Christopher Johnson, Michael Urquhart, Nick Zieminski and Chizu Nomiyama