OIL prices crashed 6 percent Friday to close below US$30 a barrel for the first time in 12 years, resuming this year’s breathtaking rout as Chinese stock markets fell further and traders braced for an imminent rise in Iran’s exports.

    After closing higher for the first time in eight sessions Thursday, U.S. and Brent crude futures plumbed new lows, taking this year’s losses to more than 20 percent, the worst two-week decline since the 2008 financial crisis.

    The slump was not over yet, some analysts warned, as the lifting of sanctions on Iran opens the door to a wave of new oil.

    The International Atomic Energy Agency (IAEA) on Saturday issued its report on Iran’s compliance with an agreement to curb its nuclear program, potentially triggering the lifting of Western sanctions.

    Shares in China, the world’s No. 2 oil consumer, tumbled Friday, with the Shanghai index ending down 3.5 percent to its lowest close since December 2014 and the yuan weakening sharply offshore. Adding to fuel demand concerns, U.S. data showed retail sales fell and industrial production weakened in December.

    Brent settled down US$1.94, or 6.3 percent, at US$28.94 a barrel, sticking below the pivotal US$30 a barrel mark after briefly dipping below that level in the previous two days. It fell as far as US$28.82, the lowest since February 2004.

    U.S. crude ended US$1.78, or 5.7 percent, lower at US$29.42, after hitting a contract low of US$29.13, its lowest since November 2003, earlier in the session.

    The oil market is oversold after two weeks of almost unrelenting selling, some traders said. The relative strength index (RSI) fell last week to below 30, a technical level often regarded as signaling a market that has fallen too far.

    Bearish traders may rush to take profits on short positions this week. Short positions in the U.S. contract rose to a record of more than 200 million barrels in the week to Jan. 12, according to U.S. data.

    “I think we will see a hard bounce in crude oil — two, three, four dollars back up into the mid 30s,” said Phillip Streible, senior market strategist at RJO Futures in Chicago.

    Even before Iran’s sanctions are lifted, Iran’s oil exports were on target to hit a nine-month high in January. Tehran is expected to target India, Asia’s fastest-growing major oil market, as well as its old partners in Europe with increased exports once sanctions are lifted.

    Despite oil prices hovering around new multi-year lows, analysts say that prices have not hit the bottom just yet, with demand likely to ease in coming weeks, especially with refiners beginning to shut for routine spring maintenance.

    A further fall in prices “cannot be excluded,” said Commerzbank analyst Carsten Fritsch told Reuters Global Oil Forum. He warned that US$25 a barrel “is quite possible, but not much lower than that.”(SD-Agencies)