Oil crashes more than 20% from October highs as Trump’s Iran sanctions fail to diminish supply fears


crude oil

Enhanced US sanctions on Iran came into effect on Monday, leading to concerns about tighter supply

But, increased production from major oil nations has eased supply issues, driving prices lower
Sell off in crude futures has seen Brent, the international benchmark, fall 20% in less than two months, otherwise known as a bear market

Brent crude prices fell to multi-month lows today as supply fears caused by US sanctions on Iran waned.

Oil prices dropped below $70 a barrel for the first time since April, having reached as high as $86 last month, on the back of trade fears and waning growth. Brent now sits at $69.76, down 1.3%.

Expectations that US sanctions on Iran could take substantial crude volumes out of the market have been mitigated by steadily increasing production out of Saudi Arabia, Russia, and the US shale industry. Those countries are now pumping at near record levels with figures suggesting 33 million barrels per day, or a third of the world’s oil, is being produced by the trio.

“There is no slowing down the bear train,” said Stephen Brennock, analyst at London brokerage PVM Oil. “Instead, the energy complex has extended a rout driven by swelling global supplies and a softening demand outlook.”

The Financial Times on Friday reported more crude oil could also be coming from Iraq, with a deal close between its federal government and the Kurdistan Regional Government to restart exports from the disputed territory of Kirkuk.

“In view of the latest price slump and the oversupply that looks set to materialize next year, the Organization of the Petroleum Exporting Countries is thinking about cutting back oil production,” analysts at Commerzbank said in a note on November 8.

US crude also dropped into a bear market on November 8 as prices fell to $59.28. Selling intensified over the …read more

Source:: Business Insider

      

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