Crude oil prices dropped to a five-year low on Tuesday, as Iraq followed Saudi Arabia in cutting prices for crude oil sales to Asia and the United States to its lowest level in 11 years.
Crude for January delivery slipped 0.56% lower at 07:10 GMT, consolidated around $62.70 a barrel. Brent crude retreated by 1.04% around $65.53 a barrel.
Iraq’s move came after Saudi Arabia cut monthly prices for the crude it sells the United States and Asia for November, in a bid to protect its market share.
Oil prices have fallen nearly 40% from June due to the low demand and rising oil supply in markets.
Brent has fallen sharply, with losses growing in late November after the Organization of the Petroleum Exporting Countries (OPEC) decided not to cut its output target.
Kuwait Petroleum’s chief executive officer Nizar Al-Adsani stated that oil prices will stay below the current level of $65 during the first half of 2015 until OPEC alters its market share (Quota), or demand for crude oil is increased.
Iraq’s decision added further signals that senior OPEC members are defending their market share, after the recent great crash of crude oil prices, which in turn will increase the negative pressure on oil prices.
Iraq is the second largest crude oil exporter on OPEC.
original source: http://www.investing.com/analysis/oil-drops-as-iraq-follows-saudi-arabia-in-cutting-prices-235271