New York oil closes below US$30 for first time since 2003

A pump jack operates in an oil field near Corpus Christi, Texas.
A pump jack operates in an oil field near Corpus Christi, Texas.PHOTO: BLOOMBERG

NEW YORK (AFP) - Oil prices closed below US$30 a barrel for the first time since 2003 in New York trade on Friday, as markets girded for exporter Iran's return after nuclear sanctions are lifted.

The New York benchmark, West Texas Intermediate crude for February delivery, finished at US$29.42 a barrel, down US$1.78 the previous day, but above its low of US$29.13.

Friday's fall took losses for the contract since the beginning of the year to more than US$7.50 a barrel, or nearly 21 per cent.

The steep drop came on the back of key oil importer China's economic slowdown and expectations that Iran will quickly begin exporting large amounts of crude when nuclear sanctions are removed, possibly early next week.

"That's going to put 500,000 barrels per day more on the market," said James Williams of WTRG Economics.

"Soon India or someone in Europe is going to purchase that oil," caving in to other exporters' markets, he said.

"And there's no indication the Saudis are going to back off on their production."