Oil starts week in negative territory

An oil rig is seen off shore in Long Beach, California, on Jan. 14, 2015. World oil prices fell Monday, dented by high global crude inventories and in subdued deals due to a public holiday in the United States, dealers said. AP PHOTO/DAMIAN DOVARGANES

LONDON–World oil prices fell Monday, dented by high global crude inventories and in subdued deals due to a public holiday in the United States, dealers said.

The market was also weighed down by reports of record daily crude output in key producer Iraq.

In late afternoon London deals, Brent North Sea crude for delivery in March sank $1.02 to trade at $49.15 per barrel.

US benchmark West Texas Intermediate for February shed $1.06 to $47.63.

Trading was expected to remain quiet as a result of the Martin Luther King Jr. holiday in the United States on Monday.

“Crude oil prices continue to remain under pressure, starting the week on the negative side amid persistent concerns regarding high levels of crude oil inventories along with a slowdown of global oil demand growth,” said Sucden analyst Myrto Sokou.

Crude futures had rebounded on Friday after the International Energy Agency declared there were signs “the tide will turn” in the battered market following recent multi-year lows.

Phillip Futures analysts added: “Although it may seem like prices are reversing already, fundamentals have not changed.

“Oversupply and weak demand is still prevalent in the market and, thus, (we) would not expect prices to rally just yet.”

Oil prices have more than halved since June, crashing on worries over global oversupply and weak demand in a stuttering world economy.

The fall was exacerbated at the end of November when the Organization of the Petroleum Exporting Countries (OPEC) said it would maintain output levels, despite the already low price and ample supplies.

Brent last week collapsed to $45.19, the lowest level since March 2009.