Oil Falls 3% on Swelling Oversupply

Oil Falls 3% on Swelling OversupplyOil Falls 3% on Swelling Oversupply

Oil prices fell 3% on Monday as Iraq announced record-high oil production feeding into a heavily oversupplied market, wiping out much of the gains made in one of the biggest-ever daily rallies last week.

Brent crude, the global benchmark, was down 90 cents at $31.28 a barrel, losing 2.8% from its closing price on Friday, when Brent surged 10%.

US crude traded $1.07 lower at $31.12 a barrel, Reuters reported.

The losses came despite news that oil producer group OPEC was evaluating holding an extraordinary meeting. Qatar's energy minister said a request for such a gathering was being discussed.

Oil prices remain near 12-year lows as global supply continues to outstrip demand.

Iraq's Oil Ministry said on Monday oil output had reached a record high in December.

Its fields in the central and southern regions produced as much as 4.13 million barrels a day, the government said.

A senior Iraqi oil official said separately the country may raise output even further this year.

In the United States, one of OPEC's largest production rivals, a further drop in the number of oil rigs was expected to weigh on output.

US investment bank Goldman Sachs said it expected production to decline by 95,000 barrels per day in 2016, higher than previously assumed.