Oil is down 27 percent this year on speculation a global glut will persist amid the outlook for increased exports from Iran after the removal of sanctions and brimming U.S. crude supplies. The nation’s stockpiles are still more than 130 million barrels above the five-year average, even after dropping by 754,000 barrels, according to Energy Information Administration data. WTI for March delivery dropped as much as $1.10 to $26.35 a barrel on the New York Mercantile Exchange and was at $26.44 at 11:35 a.m. London time. The contract slid 49 cents to $27.45 on Wednesday to the lowest close since Jan. 20. Total volume traded was about double the 100-day average. WTI declined 30 percent last year.
Oil fell on Monday as concerns about economic growth combined with signs of ample global supplies pressured prices, outweighing bullish signals from Europe, where fears of an economically damaging no-deal Brexit have eased.
Additionally, talks between OPEC members Kuwait and Saudi Arabia to resume oil production from joint fields in the Neutral Zone between the two countries, with capacity of 500,000 barrels per day, could mean more supply returning to the market.