Brent crude futures plunged as much as 5.5% to near 12-year lows on Friday as the market braced for increased Iranian oil exports, with the lifting of international sanctions possible within days.
US crude futures were down $1.40 or 4.5%, $29.80 per barrel, after posting the first significant gains for 2016 in the previous session. The contract hit a 12-year low of $29.28 in earlier trading, CNBC reported.
The March Brent contract was down 90 cents, or 3% lower at $29.98 a barrel. Earlier on Friday, it fell to $29.30. The February contract, which expired on Thursday, closed higher for the first time this year at $31.03 per barrel.
Still, US bank Goldman Sachs on Friday maintained its $40 price forecast for US crude for the first half of 2016.
"The key theme for 2016 will be real fundamental adjustments that can rebalance markets to create the birth of a new bull market, which we still see happening in late 2016," Goldman said in a report.
Others were more concerned about the impact of new exports from Iran. "In the very short term, another price drop cannot be excluded in particular after sanctions against Iran are being lifted," Commerzbank analyst Carsten Fritch told Reuters Global Oil Forum.
"That means a drop towards $25 is quite possible, but not much lower than that."
Commerzbank cut its 2016 forecast for oil prices, changing its year-end expectation for Brent to $50 per barrel, down from a previous forecast of $63.
