NEW YORK — Brent crude oil prices slumped to the lowest since mid-2004 amid speculation suppliers from the Middle East to the United States will exacerbate a glut as they fight for market share.
Futures fell 1.4 percent in London after a 2.8 percent drop last week.
Producers are focusing on reducing costs amid the price decline, Qatar's energy minister, Mohammed Al Sada, said Sunday at a gathering of Arab oil-exporting nations in Cairo.
US drillers put the most rigs back to work since July, adding 17.
Oil prices have collapsed below levels last seen during the 2008 global financial crisis on signs the market's oversupply will worsen. The Organization of Petroleum Exporting Countries effectively abandoned output limits at a Dec. 4 meeting, while the United States on Friday passed legislation that lifted a 40-year ban on crude exports.
"The market is continuing to grind lower as we search for a bottom," said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Conn. "The weak fundamental picture is the focus of the market, and it will remain so until there is a reining in of supply."
Brent for February settlement dropped 53 cents to $36.35 a barrel on the ICE Futures Europe exchange. It's the lowest close since July 5, 2004. Prices are down 37 percent this year, set for a third annual loss.
West Texas Intermediate for January delivery, which expired Monday, rose 1 cent to settle at $34.74 a barrel on the New York Mercantile Exchange. It touched $33.98, the lowest since Feb. 13, 2009. The more active February contract fell 25 cents to $35.81.
There's no need to be pessimistic about oil prices, Al Sada said at the meeting of the Organization of Arab Petroleum Exporting Countries, which included seven members. Crude is set to climb from current "very low" levels that are hurting producers, Iraqi oil minister Adel Abdul Mahdi said, without predicting when prices may rebound.
"Excess supply to the tune of 1.3 million barrels per day and OPEC's divide will keep prices depressed in the near term," said Giovanni Staunovo, an analyst at UBS Group in Zurich. "That said, supply adjustments are already under way. Non-OPEC production growth slowed almost to a standstill, and should decline next year."
The number of rigs targeting oil rose to 541, Baker Hughes Inc., an oilfield-services provider, reported Friday. US crude stockpiles have expanded to 490.7 million barrels, more than 130 million above the five-year average, Energy Information Administration data showed last week.
The spread between Brent and New York futures has shrunk to the narrowest in 11 months amid speculation that the US plans to allow domestic oil to be shipped overseas may ease the nation's oversupply. The European benchmark crude closed at a 54-cent premium to the February WTI contract. The volume of all futures traded was 36 percent below the 100-day average at 2:52 p.m. Monday.
"The Brent-WTI spread has narrowed a great deal since the lifting of the export ban," McGillian said. "We will probably return to the historical norm of WTI trading at a premium to Brent."
US producers, including Continental Resources Inc. and ConocoPhillips, had been pressing to end the restrictions. Repealing the ban could allow unfettered access to supplies, driving the most important change in US oil policy in more than a generation, but buyers may have a limited appetite for the quality of cargoes offered.
Gasoline led declines in energy stocks as a strike was deferred at Exxon Mobil Corp.'s Antwerp refinery. The strike notice has been moved to late January as talks on wages continue, Exxon said. The facility can process 307,000 barrels a day, according to data complied by Bloomberg.
"Gasoline tends to be the most volatile part of the complex, and it's enhancing its reputation today," said Tim Evans, an analyst at Citi Futures Perspective. "Exxon's Antwerp refinery was under strike threat, but the refinery is operating normally and the threat put off for a month."