Oil Slides Below $50; Hits Two Week Lows As Concerns Over Iraq Break From OPEC Agreement Mount

Having flirted with the key psychological level of $50/bbl ever since the first week of October as a result of an ongoing short squeeze due to concerns that OPEC just may pull of the production cut it agreed on in Algiers in late September, moments ago the active WTI contract dipped below $50 without any notable news.
Furthermore, as Reuters’ Amanda Cooper points out, the 1M/2M contango has now blown out to the widest level in almost a year.
As there was no immediate catalyst for the drop, traders attributed to slide to a delayed reaction from this weekend’s news that Iraq may have effectively split from the Algiers agreement, by demanding that it too should be granted the same oil production cut exemption rights as were granted to Iran, Libya and Nigeria. As a reminder, and as we reported yesterday, Iraq’s Oil Minister Jabber Al-Luaibi said Sunday at a news conference in Baghdad that his country should be exempted from output restrictions as it was fighting a war with Islamic State. “We are fighting a vicious war against IS,” Luaibi said in e briefing for reporters, adding that Iraq should get the same exemption as Nigeria and Libya.

This post was published at Zero Hedge on Oct 24, 2016.