Brent resumed its decline as Iran predicted a further slump in prices if solidarity among OPEC members falters. West Texas Intermediate in New York also surrendered yesterday’s gains.
Futures slid as much as 1.6 percent in London after snapping a five-day losing streak. Crude could fall to as low as $40 a barrel amid a price war or if divisions emerge in the Organization of Petroleum Exporting Countries, said an official at Iran’s oil ministry. The 12-member group, which supplies 40 percent of the world’s oil, may need to call an extraordinary meeting in the first quarter if the drop continues, according to Energy Aspects Ltd.
Oil is trading in a bear market as OPEC agreed at a Nov. 27 gathering not to cut output to force a slowdown in U.S. production, which has risen to the highest level in three decades. Saudi Arabia and Iraq this month widened discounts on crude exports to their customers in Asia, bolstering speculation that group members are fighting for market share.