Brent crude dropped to the lowest level in almost four years after Iraq followed Saudi Arabia and Iran in cutting prices. West Texas Intermediate’s discount to Brent narrowed.
Iraq, OPEC’s second-biggest producer, will sell its Basrah Light crude to Asia at the biggest discount since January 2009, the country’s State Oil Marketing Co., known as SOMO, said yesterday. Iran last week said it will sell oil to Asia in November at the biggest discount in almost six years, matching cuts by Saudi Arabia.
“OPEC is not ready to act and that’s making people continue to sell,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Until we see some comments out of OPEC suggesting they are going to stabilize the price, I think the market will probably keep falling.”
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