Oil traded near a 12-year low in New York as Iran issued an order to boost production in an already oversupplied market.

Futures were down 0.9 percent from the Friday settlement. Monday’s transactions will be booked with Tuesday’s because of the Martin Luther King Jr. holiday. Iran’s oil ministry gave directions to increase output by 500,000 barrels a day after international sanctions were lifted, according to the ministry’s news agency Shana. OPEC forecast a steeper drop in supplies from rival producers this year as the price crash hits the U.S. and Canada, the group said in its monthly market report.

Oil is down 21 percent this year amid volatility in Chinese markets and speculation the removal of restrictions that capped Iran’s crude sales will help to prolong a global glut. Neighboring countries will pump more within six to 12 months and take away Iranian market share if the country doesn’t boost production, said Roknoddin Javadi, managing director of state-run National Iranian Oil Co., according to Shana.

West Texas Intermediate for February delivery was 31 cents lower at $29.11 a barrel on the New York Mercantile Exchange at 7:33 a.m. Hong Kong time. Prices closed at $29.42 a barrel on Jan. 15, the lowest close since November 2003. WTI lost 30 percent last year.

Brent for March settlement dropped 39 cents, or 1.4 percent, to $28.55 a barrel on the London-based ICE Futures Europe exchange on Monday, the lowest close since December 2003. The European benchmark crude ended the session at a discount of $1.45 to WTI on Friday.

Source: Bloomberg