(MENAFN- Khaleej Times) Brent crude oil hit its lowest since 2010 on Friday, falling below $90 a barrel as Saudi Arabia said it increased production last month, fanning speculation of an Opec price war.
Fast-rising oil output in North America and tepid economic growth had raised expectations the Organisation of the Petroleum Exporting Countries will cut output when it meets in November to stem a near-25-per cent price slide since June.
But on Friday Saudi Arabia said it had boosted its oil production by 100,000 barrels per day (bpd) in September, raising doubts the world's top exporter would be prepared to take unilateral action to cut in the near future."It's panic mode. Panic and capitulation. We are now in uncharted territory," said Carsten Fritsch, commodities analyst at Commerzbank.
"The rout will probably continue until Opec says enough is enough."
Brent crude for November delivery was down 70 cents at $89.35 a barrel by 1404GMT, after earlier touching $88.11 - its lowest since December 2010. US November crude dropped 60 cents to $85.17 a barrel. The contract, also known as West Texas Intermediate (WTI), hit a session low of $83.59, its lowest since July 2012.
Oil output has also risen in Opec members Iraq and Libya, the group said in its monthly oil market report on Friday, despite violence and instability in both countries. Total Opec output grew by 400,000 bpd to 30.47 million bpd.
Combined with disappointing economic data from Europe and Asia, that has pushed Brent more than $25 lower since hitting a year high of $115.71 in June. Brent is on track to record the third straight week of losses.
Cuts to Iran's official selling prices for its crude raised more doubts about the group's willingness to curtail supply in an effort to stabilise prices. Fritsch called the Iranian price cut "a devastating signal", and analysts said other producers could follow suit.
Any action is unlikely before Opec's November 27 meeting. On Thursday, the main reference price for Opec crude oil exports fell to its lowest since 2010, tracking the slump in global oil benchmarks.
The relentless decline in oil prices prompted investment bank Barclays to slash its fourth-quarter average forecast for Brent to $93 a barrel from $106 previously. It also cut its estimate for WTI to $85 from $98.
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