[LONDON] Brent crude oil prices fell below US$50 a barrel on Monday after Iraq announced record oil production and the global economic outlook darkened.
Iraqi Oil Minister Adel Abdel Mehdi said on Sunday Iraq pumped 4 million barrels per day (bpd) of oil in December, its highest ever thanks to higher output from its southern terminals and a surge in supply from the north.
Abdel Mehdi 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 US$49.40 a barrel by 1015 GMT, down 77 cents. US crude was trading down 74 cents at US$47.95 a barrel.
"There's still more supply than demand and that's a situation that will not change in just a few weeks," said Hans van Cleef, energy economist at ABN Amro.
Oil prices have dropped by more than half since last June as output around the world has soared while demand growth has slowed. Although 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.
Analysts said prices found some support from a drop in US 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 US 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.
China, the world's biggest energy consumer, is expected on Tuesday 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.
A meeting of the European Central Bank on Thursday will likely see the launch of a government bond-buying campaign, pointing to further euro falls against the dollar as well as to downward pressure on oil prices.
"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.