Oil Trades Lower in Year-End Cooling off

TEHRAN (Fars News Agency)- World oil traded lower in Asia on Monday as the market entered a traditional year-end cooling off period and concerns persisted over slower US economic growth, dealers said.

In morning trade, New York’s main oil futures contract, light sweet crude for January delivery, was 49 cents lower at $87.79 per barrel, from $88.28 in New York on Friday.

Brent North Sea crude for January delivery was 24 cents lower at $88.40 a barrel from $88.64 in London on Friday.

Dave Ernsberger, Asia director of global energy information provider Platts, said the oil market traditionally cools at this time of year and there are now no strong factors that would lead to a rally.

“This is when you would expect prices to fall pretty significantly, actually,” he said, describing the mood as “cautiously bearish”.

Crude prices have fallen in choppy trading since striking record highs close to $100 in late November.

Oil market experts say there are widespread fears of a US-led global economic slowdown that could dampen demand for energy, especially oil.

On Wednesday, prices initially spiked in reaction to a decision by OPEC, at a crucial meeting in Abu Dhabi, to leave its daily crude output quota unchanged at 27.25 million barrels.

Values subsequently fell back, which Ernsberger said probably reinforces bearish sentiment.

The Organization of the Petroleum Exporting Countries (OPEC) pumps about 40 percent of the world’s crude supplies.

OPEC member Iran, and China’s Sinopec, on Sunday signed a contract worth an estimated $2 billion to develop a major Iranian oil field. The Yadavaran onshore field in southwestern Iran will be producing 185,000 barrels of oil a day within the next seven years, said Iranian Oil Minister Gholam Hossein Nozari.

It is one of the biggest foreign energy contracts ever signed by Iran.

In a separate development, on Saturday the Iranian oil minister said his country has completely stopped carrying out its oil transactions in dollars, labeling the greenback an “unreliable” currency.