On Monday Brent crude oil prices dropped below $50 a barrel after Iraq announced record oil production darkening the global economic outlook.
On Sunday Iraqi Oil Minister Adel Abdel Mehdi announced Iraq pumped 4 million barrels per day (bpd) of oil in December, its highest production ever.
The minister said Iraq planned to a big increase in exports from the northern city of Kirkuk and the Kurdistan region, which would increase production to 600,000 bpd from April.
Brent crude traded around $49.40 a barrel by 1015 GMT, down 77 cents. U.S. crude was trading down 74 cents at $47.95 a barrel.
Though the International Energy Agency (IEA) said last week a reversal in the trend was possible this year, it added that prices may fall further before rising. Prices found some support from a drop in U.S. drilling rigs, signifying a likely fall in production in the future. But they said there was not much room for gains.
"Some positive data points helped to stabilise oil for now ... Upbeat IEA comments and a falling U.S. rig count were the latest positive news. While the news was able to halt oil's price decline, it (is) not enough to turn prices bullish," Morgan Stanley said in a note to clients on Monday.
On Tuesday China, the world's biggest energy consumer, is expected to report its weakest economic growth for more than two decades. Data from China's National Bureau of Statistics showed on Sunday house prices fell for a fourth straight month.
"It is not hard to find evidence of increasing concerns around global economic weakness. Yield curves across the world have been flattening (longer term yields falling relative to short ones), a dynamic typically associated with expectations of weakening economic conditions," Timera Energy said on Monday.
As Reuters reports, a meeting of the European Central Bank on
Thursday will likely see the start of a government bond-buying
campaign, driving further euro falls against the dollar as well as
to downward pressure on oil prices.
