* Brent trades less than 50 cents above 2008 crisis lows
* New supply expected early 2016 as Iran boosts output
* Global glut grows as producers threaten new price wars
(Repeats to additional subscribers)
By Dmitry Zhdannikov and Amanda Cooper
LONDON, Dec 14 (Reuters) - Oil prices tumbled 4 percent on
Monday, coming close to their 11-year low, on growing fears that
the global oil glut would worsen in the months to come in a
pricing war between leading OPEC and non-OPEC producers.
Brent crude LCOc1 fell by 4 percent to below $36.40 a
barrel for the first time since December 2008 and U.S. West
Texas Intermediate (WTI) CLc1 sank almost 3 percent below
$34.60 a barrel.
Brent traded only 14 cents above the lows last seen during
the 2008 financial crisis of $36.20 a barrel.
If Brent falls below that level, that will be its lowest
since mid-2004 - a year when oil was beginning its surge from
the single digits it hit during the 1998 financial crisis and
when talk of a commodity super-cycle was only beginning.
WTI's financial crisis low was $32.40 in December 2008.
"Oil is coming under pressure as the lack of OPEC cuts mean
incessant oversupply continues," said Amrita Sen from Energy
Aspects think tank.
Both benchmarks have fallen every day since the Organization
of the Petroleum Exporting Countries on Dec. 4 abandoned its
output ceiling. In the past six sessions, they have shed more
than 13 percent each.
OPEC has been pumping near record levels since last year in
an attempt to drive higher-cost producers such as U.S. shale
firms out of the market.
New supply is likely to hit the market early next year as
OPEC member Iran ramps up production once sanctions are lifted
as expected following the July agreement on its disputed nuclear
programme.
"All new production will be earmarked for exports," BMI
Research said in a note. "In addition to volumes released from
storage, Iran will be able to increase crude oil and condensates
exports by a maximum of 700,000 b/d by end-2016," it said.
Iran's crude oil exports are set to hit a six-month high in
December as buyers ramp up purchases in expectation that
sanctions against the country will be lifted early next year,
according to an industry source with knowledge of tanker loading
schedules.
Iranian news agency Shana quoted on Monday manager director
of Iran's Central Oil Fields Company, Salbali Karimi, as saying
Iran's cost of production stood $1-$1.5 per barrel, in a clear
indication it would ramp up output in any price scenario.
Gulf producers and Russia have said they would not cut
output even if prices fell to $20 per barrel.
On Friday, the International Energy Agency (IEA) said that
the global supply glut was likely to deepen next year and put
more pressure on prices. EIA/
OPEC supply is likely to increase by 1 million bpd next
year, Morgan Stanley (N:MS) analysts said in a research note on Monday.
"Almost the entirety of added supplies in 2016 will come
from Iran, Iraq and Saudi," it said.