Oil just fell below $50 as Russia, Iraq ramp up production amid global glut

(Source) West Texas Intermediate oil fell below $50 a barrel for the first time since April 2009 as surging supply signalled that the global glut that drove crude into a bear market will persist.

Futures slid as much as 5.2 per cent in New York. Brent futures earlier slid below $55 in London for the first time since May 2009. Russia’s output rose to a post-Soviet high in December, preliminary Energy Ministry data showed. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, plans to boost crude exports to a record this month, the Oil Ministry said.

“This bearish market is being fed by a combination of surging supply and shaky demand,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “We now have Russian production at a post-Soviet high and the Iraqis planning to add even more supply to the market. This just adds to negative market sentiment.”

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