Oil traded below $48 a barrel as the U.S. signaled it won’t intervene in the market even as prices decline.
Futures fell as much as 3 percent in New York from the Jan. 16 settlement after floor trading was closed Monday for the Martin Luther King Jr. holiday. The U.S., the world’s biggest oil user, will let the market decide what happens, according to Amos Hochstein, the State Department’s energy envoy. Iran is strong enough to withstand a deeper slump even if it must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said.
Crude collapsed almost 50 percent last year as the U.S. pumped at the fastest rate in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to cut supply. While Iran is consulting with producers in the 12-member group to respond to the decline, OPEC has made no decision to reduce its collective output target, Zanganeh said.
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