[LONDON] Oil prices steadied on Thursday, but remained near 12-year lows on the prospect of Iran unleashing its oil on an oversupplied market and few signs of improving demand in a fragile global economy.
Brent crude, the global benchmark, dropped as far as US$29.73 a barrel, the lowest since February 2004, before steadying at US$30.51 a barrel by 1018 GMT.
West Texas Intermediate (WTI) was up 27 cents at US$30.75 a barrel. Brent crude prices, which typically trade at a premium to US oil, have slipped to the widest discount to WTI since November 2014. "With no apparent signs of strengthening demand, and only further indicators of future global supply growth, the outlook for oil prices is leading most market watchers to ratchet down estimates for oil prices in 2016 and 2017," analysts at Cenkos Natural Resources said.
The United Nations' nuclear watchdog is likely to confirm on Friday that Iran has curtailed its nuclear programme as agreed with world powers, paving the way for sanctions to be lifted.
Barclays said it had raised its estimates of Iranian oil supply on speedier-than-expected lifting of western sanctions. Analysts at the bank said they now assume that Iran will produce almost 700,000 barrels a day more in the fourth quarter of 2016 than over the same period in 2015.
Data showing that US crude inventories rose 234,000 barrels last week, much less than expectations, was overshadowed by reported builds of 8.4 million barrels in gasoline and over 6 million in distillates, which includes diesel and heating oil.
Oil and gas projects worth $380 billion have now been postponed or cancelled since 2014 as companies slash costs to survive the oil price crash, including $170 billion of projects planned between 2016 and 2020, according to a new report from energy consultancy Wood Mackenzie.
The price fall "intensifies the squeeze on working capital and makes effective cash management all the more important,"said Lance Kawaguchi, managing director and global sector head for energy and resources at HSBC.