Oil prices ease in Asian trade, stuck near 12-year lows

However, there is talk that crude — which has plunged by three quarters in the past 18 months on weak demand, a slow global economy and an oversupply crisis — could be nearing its bottom.

US benchmark West Texas Intermediate (WTI) for delivery in February was down 61 cents, or 1.96 percent, at $30.59 by around 0600 GMT.

Brent for March was down 34 cents, or 1.10 percent, at 30.54.

This week both main contracts fell below $30 a barrel for the first time since the first half of 2004.

Michael McCarthy, chief market strategist at CMC Markets in Sydney, said prices may have hit or are nearing the end of their downward spiral.

“If we’re not at the lows, we’re very close to the lows for oil,” he told AFP.

“I do expect to see a turn very soon. However, it is not uncommon to see a market near its lows to have a last final spike so I wouldn’t rule that out… It is possible that we’re now looking at a floor forming.”

Two weeks into 2016, oil prices have shed more than 15 percent as investors worry about the prolonged oversupply crisis and weak global economic outlook, particularly in chief energy user China.

However, with major producer Iran poised to return to the international market after Western-backed nuclear sanctions are lifted, there are fears the losses could mount.

The implementation of a deal between the two sides, allowing the removal of sanctions, is expected by Sunday.

“Although both WTI and Brent seem to be generating some bullish momentum, we believe that it may not last,” said Daniel Ang, an analyst with Phillip Futures in Singapore.

“It is the wrong time for Iran to be returning to the oil market.”