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Global Markets Swoon On Record Oil Output From Iraq

An announcement from Iraq that it is pumping oil at record levels has helped send oil prices and stock markets tumbling around the world.

Iraq's Oil Ministry told Reuters on January 25 that the country reached record output in December, with its fields in the central and southern regions producing as much as 4.13 million barrels a day.

A senior Iraqi oil official said the country aimed to raise output even further this year, apparently following in the footsteps of neighboring Iran, whose plans to hike production have sent markets reeling this year.

The news touched off another big fall in oil prices on January 25 and helped set off further drubbing of battered global stock markets, with energy stocks leading the downturn.

Brent premium crude-oil futures plunged 6.7 percent to $30.03 a barrel in London, while U.S. premium crude prices dropped 7.6 percent to $29.75 in New York.

The prospect of more turmoil and bankruptcies in the oil sector sent stocks slumping by 1 percent or more from Tokyo to Wall Street.

"The news that Iraq has probably hit another record builds on the oversupply sentiment" that has weighed down markets and raised worries about global economic growth, Hans van Cleef, senior energy economist at ABN Amro, told CBC News.

Based on reporting by Reuters, AFP, and CBC News

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