In early trade, U.S. benchmark West Texas Intermediate was 16 cents down at $35.46 around 0500 GMT, while Brent crude was 26 cents lower at $37.67.
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Global crude prices have been falling for months, with the latest plunge coming as Iran renewed its pledge to boost its crude exports, adding to the glut of oil on the world market.
Brent’s session low was $US37.36 – barely a dollar above the $SU36.20 hit during the financial crisis. On Monday it rose 1.94 percent to $36.31, after briefly flirting with 11-year lows.
The US oil price pared earlier loses on Monday as traders started to buy in after the sharp decline of last week.
California Resources Corp (NYSE:CRC) share price decreased in the last trading session with a previous 52-week high of $9.82.
The weakness in crude has spread to some oil products, hitting prices.
Russian producers have also stated they will not reduce output even if prices were to drop below $20 a barrel.
And last Friday the International Energy Agency had warned that it sees the global oil glut worsening through late 2016.
Pointing to the economic crisis of 2008 leading to the volatility of oil prices, ICOFC official said “the cause is that oil is not a commodity and many factors are involved in its purchase due to having influence on all security, economic and political areas, which imposes the maximum risk on oil prices”.
In its December oil market report, the Paris-based IEA said that global demand will grow by just 1.2 million barrels per day next year, down from a previous estimate of 1.8 million, widening the gulf in the supply-demand imbalance worldwide.
Crude has slumped dramatically since the OPEC oil producers’ group on December 4 opted against cutting its output levels, and there are warnings of further pain ahead as the global economy struggles.
“Land storage capacity is now limited but OPEC keeps increasing production so the oil price is relentlessly trending down”. After OPEC’s decision, both WTI and Brent crude oil benchmarks broke under $40 per barrel.
World powers said they persuaded some of Libya’s feuding factions to form a new government of national unity and act against Islamic State.
The cost of producing one barrel of oil in Saudi Arabia is $4 to $6 a barrel, close to $5 in Kuwait, $7 in Iraq and the Emirates, $15 in Qatar and Iran, $25 in Algeria, $30 in Nigeria and $40Angola.
Analysts have ratcheted down their oil-price forecasts in recent weeks, and some now expect average oil prices in 2016 to be lower than in 2015.
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“The next quarter is going to be particularly tough as we go from a high-demand to a low-demand quarter”, said Richard Gorry, director of consultancy JBC Energy Asia.
