Crude Oil Closes Under $30, First Time Since August

U.S. crude oil prices closed under $30 for the first time in nearly four months, as traders on Tuesday put faith in Iraqi claims that it was working to end its five-day export stoppage.

January futures on the New York Mercantile Exchange settled down $1.69 at $29.53 a barrel, continuing a four-session decline that has helped ease global concerns over the economic impact of high oil prices. Nymex near-term futures last traded under $30 a barrel on Aug. 9.

Even as oil plunged, January natural gas prices on the Nymex hovered in record territory, settling at $7.384 per million British thermal units after Monday’s all-time contract high of $7.433.

Crude oil has slid nearly $6 since the Thanksgiving holiday as supplies released from the U.S. Strategic Petroleum Reserve in September slowly help to rebuild thin U.S. winter stocks.

However, crude prices rebounded about 10 cents in after-hours trading Tuesday on a report from the American Petroleum Institute showing that inventories fell an unexpected 3.73 million barrels to 287.8 million barrels.

Experts expect further price declines as a two-year bull run that took oil from $10 a barrel to more than $37 just 11 weeks ago screeches to a halt.

Tuesday’s decline came after Iraq, which supplies 4% of the world’s daily demand of about 76 million barrels of oil, signaled that it wanted to resolve its halt in oil supplies.

“It’s really an incredible collapse, and what has caused it is a lot of ifs, ands and maybes,” said Phil Flynn, an analyst at Alaron Research in New York.