WTI sinks to lowest in almost 7 years as Iran pledges more oil

Futures dropped as much as 1 percent in New York after losing almost 11 percent last week, the most in a year.

There’s “absolutely no chance” Iran will delay its plan to increase shipments even as prices decline, said Amir Hossein Zamaninia, the deputy oil minister for international and commerce affairs.

Hedge funds and other large speculators raised bearish bets to an all-time high, U.S. Commodity Futures Trading Commission data showed.

Oil has slumped to levels last seen during the global financial crisis as the Organization of Petroleum Exporting Countries effectively abandoned production limits to defend market share, fueling a record surplus.

The glut will persist at least until late 2016 as demand growth slows and OPEC shows “renewed determination” to maximize output, according to the International Energy Agency.

“The price war will likely drag on until the end of next year,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, said by phone.

“Saudi Arabia won’t be able to cut its production while Iran continues to increase output.”

WTI for January delivery fell as much as 35 cents to $35.27 a barrel on the New York Mercantile Exchange and was at $35.49 at 1:31 p.m. Seoul time.

The contract decreased $1.14 to $35.62 on Friday, the lowest settlement since February 2009. The volume of all futures traded was about 16 percent above the 100-day average.

Brent for January settlement was down as much as 49 cents, or 1.3 percent, at $37.44 a barrel on the London-based ICE Futures Europe exchange.

It slid $1.80 to $37.93 on Friday, the lowest close since December 2008. The European benchmark crude was at a premium of $2.21 to WTI.

Iran, which expects international sanctions over its nuclear program to be lifted by the first week of January, has already secured customers for its planned supply expansion, Zamaninia said in an interview in Tehran.

The government is also preparing to offer oil and natural gas contracts to investors. The country pumped 2.8 million barrels a day last month, data compiled by Bloomberg show.

“Our general assumption is on a market with low prices, so the price can drop as low as possible as we are prepared for the worst scenario,” Zamaninia said.

OPEC, which set aside its output quota at a Dec. 4 meeting, is displaying hardened resolve to maintain sales, the IEA said in its monthly report Friday.

While the group’s strategy has impacted other producers, triggering the steepest fall in non-OPEC supply since 1992, world oil inventories will probably swell further once Iran restores exports, the Paris-based energy adviser predicted.