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Oil headed for a seventh weekly decline in New York and London amid speculation that OPEC won't pare output to reduce a global surplus.
West Texas Intermediate slipped as much as 2.8 percent today while Brent fell 3.4 percent. The United Arab Emirates has no plans to reduce output no matter how low prices drop, according to Yousef Al Otaiba, the nation's ambassador to the U.S. Representatives from Saudi Arabia, Kuwait and the U.A.E. stressed a dozen times in the past six weeks that OPEC won't curb output to halt the rout. WTI's discount to Brent shrank to its narrowest since October.
"The price war continues and there's a great deal of excess supply," Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said by phone. "The statements from the U.A.E. ambassador show that they're doubling down and taking no prisoners. This will be a long fought war and they have the Saudis behind them."
Oil is trading near the lowest levels since April 2009 amid concern that a global supply surplus estimated by Qatar at 2 million barrels a day will persist this year. The Organization of Petroleum Exporting Countries is battling a U.S. shale boom by resisting production cuts, signaling it's prepared to let futures fall to a level that slows the American output.
West Texas Intermediate for February delivery slipped $1.22, or 2.5 percent, to $47.57 a barrel at 11:06 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 17 percent above the 100-day average for the time of day. The contract touched $46.83 on Jan. 7, the lowest intraday price since April 21, 2009. Futures are down 9.8 percent this week.
Brent for February settlement decreased $1.45, or 2.9 percent, to $49.51 a barrel on the London-based ICE Futures Europe exchange. Volume for all futures traded was 56 percent above the 100-day average. The North Sea oil is down 12 percent this week. The European benchmark crude traded at a $1.92 premium to WTI.
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