Brent drops below $70 as Saudi’s cuts wholesale oil prices

By Florence Tan.SINGAPORE, Dec 5 (Reuters) – Brent crude extended losses below $70 a barrel on Friday and was set for a second weekly fall, with Saudi Arabia cutting prices in another indication it would maintain output in an oversupplied market..Saudi Arabia cut monthly prices for crude it sells to the United States and Asia, while Iraq is set to export more oil, preventing Brent from staging a recovery after a near 13-percent plunge last week.."We're heading for $60 for Brent. (There is) nothing to stop it," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo..Brent crude fell 48 cents to $69.16 a barrel by 0449 GMT. U.S. crude was down 42 cents at $66.39, but still on track for a small gain of less than 1 percent this week..Just a week after Saudi Arabia refused to support OPEC output cuts, the world's top exporter slashed its oil prices for Asian and U.S. buyers.."It's another sign that they want to maintain production levels," Nunan said..The battle for market share is likely to heat up next year when Iraq starts to export more oil after Baghdad reached a temporary agreement with the Kurdish regional government..Adding to supply, Libya is set to restart its largest oilfield, El Sharara, once a pipeline blockage is cleared..A colder-than-expected winter may support oil, Nunan said, although prices are likely to slide after peak-demand season ends in the first quarter next year..Analysts said in a Reuters monthly poll that prices are expected to rebound in the next two years from five-year lows this week as the market stabilises..Brent will average $82.50 a barrel in 2015 and its premium to U.S. crude will narrow to $4.50 a barrel, the poll showed..The price plunge may put global oil and gas exploration projects worth more than $150 billion on hold next year, potentially curbing supplies by the end of the decade..But lower prices could support global economic growth by boosting consumer purchasing power in the United States, said Jade Fu, investment manager at Heartwood Investment Management in London.."We believe that the expected boost to the U.S. consumer from falling oil prices outweighs the risks to the energy sector," Fu said. "That's good news for global growth."

Brent drops below $70 as Saudi’s cuts wholesale oil prices

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