Jan. 2 (UPI) -- Crude oil prices were lower early Monday amid ongoing concern that the market remains oversupplied, while the demand outlook may weaken due to lower consumption in China, the world's biggest crude oil importer.
West Texas Intermediate front-month crude prices were down 1 percent as of 08:00 a.m. EST to $44.95 per barrel while Brent crude futures declined 0.9 percent to $53.30 per barrel.
"It looks as though Brent calendar spreads indicate a slightly oversupplied market for 2019. China manufacturing data shows a sharp slowdown weighing on oil market demand sentiment," Amir Hekmati, oil futures spec trader at Lucid Energy, told UPI early Wednesday.
Brent oil prices have declined about 38 percent since an early October peak, as concerns about potential supply disruptions in light of U.S.-nuclear related sanctions against Iran started to sharply decline in the second half of October -- after Saudi Arabia announced production increases to cover any supply decline.
Then, on Nov. 5, as the sanctions went into effect, the United States issued waivers to eight nations that buy Iranian crude, including the biggest purchasers. The waivers news, combined with reports of U.S. oil output reaching record high levels, quickly changed market sentiment to one of global oversupply concerns.
In December, OPEC and Russia announced plans to cut output by a combined 1.2 million barrels per day, but the accord -- which came after extensive negotiation -- failed to influence a recovery of oil. There were also doubts as to whether the group will be able to enforce the agreement.
The market now awaits what will happen after the Iran waivers expire in March. Iran was producing in April, before the sanctions were announced, 3.8 million barrels per day, of which 2.8 million barrels per day were being exported.
"Until we see a clearer supply and global trade picture, the oil market will remain depressed with the potential to go lower," Hekmati said.
The U.S. production is surging thanks to output from non conventional, or shale, fields.
The Energy Information Administration on Friday released the latest crude oil production data corresponding to October, with the U.S. producing 11.54 million barrels per day, a 0.7 percent increase from the previous month, but nearly 19 percent above the previous year.
Texas alone produced 4.7 million barrels per day in October, a 0.4 percent increase from the previous month, and a 24.5 percent gain year-over-year.