* Brent, U.S. crude heading for third weekly loss
* Chinese stocks breach Dec 2014 closing low
* Iran sanctions could be lifted within days
(Updates prices)
By Devika Krishna Kumar
NEW YORK, Jan 15 (Reuters) - World oil prices slumped more
than 6 percent to below $29 a barrel on Friday, as a further
fall in the Chinese stock market and the prospect of an imminent
rise in Iran's crude exports deepened fears of a longer supply
glut.
After closing higher for the first time in eight sessions on
Thursday, U.S. and Brent crude futures slumped to new 12-year
lows, taking this year's losses to more than 20 percent, the
worst two-week decline since the 2008 financial crisis.
The slump was not over yet, some analysts warned, as the
lifting of sanctions on Iran opens the door to a wave of new
oil. The International Atomic Energy Agency (IAEA) is expected
later on Friday in Vienna to issue its report on Iran's
compliance with an agreement to curb its nuclear program,
potentially triggering the lifting of Western sanctions.
Shares in China, the world's No. 2 oil consumer, tumbled on
Friday, with the Shanghai index ending down 3.5 percent to its
lowest close since December 2014 and the yuan weakening sharply
offshore. Adding to fuel demand concerns, U.S. data showed
retail sales fell and industrial production weakened in
December. ID:nL8N14Y1QC ID:nL2N14Z0V3
The "ongoing worries regarding the pace of economic growth"
spurred a new round of selling in the oil market, said Tim
Evans, energy futures specialist at Citi Futures.
Brent LCOc1 futures for March delivery fell $1.94 to
$28.94 a barrel, a 6.3 percent loss, by 12:41 p.m. EST (1741
GMT), after touching a session low of $28.82, the lowest since
February 2004.
U.S. crude CLc1 fell $2.01 to $29.19 per barrel, a 6.4
percent loss, after hitting a contract low of $29.13, its lowest
since November 2003.
Even before Iran's sanctions are lifted, Iran's oil exports
were on target to hit a nine-month high in January. Tehran is
expected to target India, Asia's fastest-growing major oil
market, as well as its old partners in Europe with increased
exports once sanctions are lifted.
Despite oil prices hovering around new multi-year lows,
analysts say that prices have not hit the bottom just yet, with
demand likely to ease in coming weeks, especially with refiners
beginning to shut for routine spring maintenance.
A further fall in prices "cannot be excluded", said
Commerzbank (DE:CBKG) analyst Carsten Fritsch told Reuters Global Oil
Forum. He warned that $25 a barrel "is quite possible, but not
much lower than that."
The oil price collapse has hammered currencies from
commodity-producing nations and spooked financial markets as
investors worry about the health of the global economy.
MKTS/GLOB
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CHART-Brent oil to approach support at $29.85 again http://graphics.thomsonreuters.com/US/2/PVB_20161501085039.png
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