Crude oil slipped towards $30 per barrel to a near 12-year low on Tuesday as heavy oversupply showed no sign of easing, while analysts scrambled to cut their price forecasts and traders bet on further declines.
Prices are down around 16 percent since the start of the year, dragged lower by a glut, China's weakening economy and stock market turmoil, as well as the strong dollar, which makes it more expensive for those using other currencies to buy oil.
"The bearish sentiment surrounding the commodity has intensified," said Brenda Kelly, head analyst at London Capital Group.
International benchmark Brent crude fell to a low of $30.43 per barrel, a level last seen in April 2004, before recovering to $31.43, down 12 cents or 0.38 percent, by 1028 GMT.
It was down for the seventh consecutive session, and has fallen every day of 2016 so far.
US crude West Texas Intermediate (WTI) fell to a low of $30.41 per barrel, a level last seen in December 2003, before crawling back to $31.06, down 35 cents or 1.11 percent.
Trading data showed that managed short positions in WTI crude contracts, which would profit from a further fall in prices, are at a record high, implying that many traders expect further falls.
China's slowing economy has been another factor contributing to the oil rout, which has pulled prices down by around 70 percent since mid-2014.
And while demand looks fragile, supply from key producers remains robust.
Iraq, the second-biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), plans to export a record of around 3.63 million barrels per day from its southern oil terminals in February, trade sources said.
They cited a preliminary loading programme, up 8 percent from this month.
Nigeria's oil minister said a "couple" of OPEC members had requested an emergency meeting, adding that current market conditions support the need to hold such a gathering.
Analysts have been shifting their price outlooks downward, with Barclays, Macquarie, Bank of America Merrill Lynch, Standard Chartered and Societe Generale cutting their 2016 oil forecasts this week.
StanChart took the most bearish view.
"We think prices could fall as low as $10/bbl before most of the money managers in the market conceded that matters had gone too far," the bank said.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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