Oil dips on glut concerns as Iran exports loom
Crude oil prices slipped lower on Monday as a UN Security Council vote highlighted the prospect of Iranian oil returning to the global market
Crude oil prices slipped lower on Monday as a UN Security Council vote highlighted the prospect of Iranian oil returning to the global market.
West Texas Intermediate for delivery in August, the US benchmark, fell for the fourth straight session, dropping 74 cents to US$50.15 a barrel on the New York Mercantile Exchange. London, global benchmark Brent North Sea crude for September delivery closed at US$56.65 a barrel, down 45 cents from Friday's settlement.
For the WTI contract, Monday's closing level was the lowest since March 17, when it settled at US$43.46. Several times during the session it dipped below US$50, flirting with its lowest close since Apr 2. "The market is in search of a bottom," said Gene McGillian of Tradition Energy.
According to the analyst, "with the dollar rising the market is still trying to price in the idea we could have additional supplies to oil come to the market" in the near future, following the expected lifting of economic sanctions against Iran.
Earlier in the day the United Nations Security Council unanimously adopted a resolution endorsing the historic deal reached last week between six major powers and Iran on Tehran's nuclear program.
Citi Futures analyst Tim Evans said that oil was swept up Monday in a wider decline in commodity prices, pointing out gold dropped to new five-year lows.
"We continue to view the current physical surplus as sufficient to drive price lower, but more Iranian production will certainly add to the overhang and push an eventual rebalancing of market further down the road," Evans said.
The Islamic Republic's exports could reach a potential 2.4 million barrels per day in 2016, from 1.6 million barrels in 2014, according to data from economist Charles Robertson at investment bank Renaissance Capital.
Iran’s oil return a game changer for OPEC, but not for nowTehran’s determination to reclaim its position as OPEC’s second largest producer after it clinched the deal on Tuesday will cause new rivalries Banking & Finance
Iran oil exports could jump by 60 pct in a yearIran will increase its oil exports by up to 60 percent within a year if it agrees a nuclear deal with world powers bringing an end to sanctions Energy
Oil prices fall as Iran, global powers reach nuclear dealOil prices tumbled more than $1 on Tuesday after Iran and six global powers reached a landmark nuclear deal Energy
Oil tumbles as Iran nuclear deal loomsThe chance of Iran adding to a global oil surplus at a time of weak demand led some analysts to forecast more oil prices falls Energy
Oil prices recover as Iran talks, Greek crisis drag onOil prices recovered after the Iran nuclear talks were extended giving markets a breather despite uncertainty over the Greek financial crisis Economy