Oil prices: Glencore chairman Tony Hayward and UBS chairman Alex Weber warn oil to stay lower for longer as WTI slides towards $27
Market mavens beat the "lower even for longer" drum on oil prices during an annual meeting of global political and business elites, as US crude careered towards $27 per barrel.
Brent crude, the global benchmark, shed 2.89 per cent to $27.93 per barrel today. West Texas Intermediate (WTI) crude, the US benchmark, slumped 3.4 per cent to $28.58.
Speaking at the World Economic Forum in Davos, Glencore chairman Tony Hayward told Bloomberg that oil prices will hover around $30 per barrel for some time due to "too much oil" and slowing demand growth.
His pessimism was echoed by UBS chairman Alex Weber, who warned oil prices could fall further once Organization of the Petroleum Exporting Countries (Opec) member Iran returns to the market.
"I don't see a bottoming out of oil prices – and a re-spiking – anytime soon," Weber said.
"The lifting of Iran sanctions, in my view, will continue to add supply."
Iran, home to 10 per cent of the world's proven reserves, has pledged to pump 500,000 barrels per day following the removal of Western sanctions. While this has been expected for some time, it's still compounded downward pressure on oil prices recently.
It comes after the International Energy Administration (IEA) warned yesterday that oil markets risk drowning in oil this year. It expects supply to exceed demand by one million barrels per day, placing "enormous strain" on the oil system.
A number of investment banks have warned a worse case scenario could see it plummet even further. Standard Chartered said prices could go as low as $10 per barrel, while Goldman Sachs and Morgan Stanley cautioned it could fall to $20.
Oil prices have fallen more than 70 per cent since the rout began 18 months ago, amid the widening gap between supply and demand.
Opec failed to agree a production ceiling at its bi-annual meeting last month, adding more downward pressure to oil prices. Saudi Arabia favoured maintaining output to hurt the emerging US shale gas industry, however poorer countries wanted to cut production to boost prices.
Prices had already been on a downward trajectory. This is due a supply glut compounded by waning demand from the slowing emerging market economies, led by the world's biggest oil consumer China.
Stocks data from industry group the American Petroleum Institute is due out later today. Official data from the US. Department of Energy's EIA will be released tomorrow.