Investing.com - Oil prices sold off for the second straight session on Tuesday, after Iran said it planned to increase crude exports to 2.3 million barrels per day in its next fiscal year, starting March 21.
The comments triggered fresh losses in the oil market, as traders worried that Iranian supplies will add to a global surplus.
On the ICE Futures Exchange in London, Brent oil for April delivery slid to an intraday low of $32.50 a barrel, the weakest since January 27, before trading at $32.73 a barrel by 13:50GMT, or 8:50AM ET, down $1.51, or 4.4%.
A day earlier, London-traded Brent futures plunged $1.75, or 4.86%, amid doubts over the likelihood of a deal between Russia and OPEC producers to cut output happening anytime soon.
Brent prices are still up nearly 16%, since falling to a 12-year low of $27.10 on January 20, as speculation OPEC and non-OPEC producers may be edging closer to a deal to cut production in an effort to tackle one of the biggest supply gluts in decades fueled a short-covering rally.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share. Oversupply issues will be exacerbated further as Iranian exports return to the global oil market.
Elsewhere, crude oil for delivery in March on the New York Mercantile Exchange sank $1.21, or 3.84%, to $30.41 a barrel during morning hours in New York after hitting a session low of $30.31, a level not seen since January 26.
On Monday, New York-traded oil futures tumbled $2.00, or 5.95%. The U.S. benchmark is still up 13% since falling below $27 for the first time since September 2003 on January 20.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 4.8 million barrels in the week ended January 29.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $2.32, compared to a gap of $2.62 by close of trade on Monday.