Investing.com - Brent oil futures fell further below the $30-level to hit a fresh 12-year low on Thursday, amid ongoing concerns over a global supply glut.
Oversupply issue will be exacerbated further once Iran returns to the global oil market once western-imposed sanctions are lifted. Analysts say the country could quickly ramp up production by around 500,000 barrels, adding to the glut of oil that has sent prices tumbling.
On the ICE Futures Exchange in London, Brent oil for March delivery sank to a session low of $29.70 a barrel, a level not seen since January 2004, before recovering slightly to trade at $30.23 by 08:50GMT, or 3:50AM ET, up 5 cents, or 0.17%. A day earlier, Brent prices tumbled 67 cents, or 2.16%.
London-traded Brent futures are down 19% since the start of the year, as ongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longer than anticipated.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.
Most market analysts expect a global glut to worsen this year due to soaring production in North America, Saudi Arabia and Russia.
Elsewhere, crude oil for delivery in February on the New York Mercantile Exchange inched up 21 cents, or 0.67%, to trade at $30.69. On Wednesday, New York-traded oil futures tacked on 4 cents, or 0.13%, in choppy trade.
Weekly supply data from the U.S. Energy Information Administration showed that gasoline and distillate supplies in the U.S. rose sharply last week, underlining concerns over a slowing demand for oil products.
Nymex oil tumbled to $29.93 on Tuesday, the lowest level since December 2003. The U.S. benchmark has lost nearly 17.5% since 2016 began.
Meanwhile, Brent's discount to the West Texas Intermediate crude contract stood at 46 cents, compared to a gap of 20 cents by close of trade on Wednesday.
U.S. crude has been firmer relative to Brent lately, on signs that the U.S. oil market is likely to grow tighter following Congress' decision to lift a 40-year old ban on domestic oil exports.