USA crude oil was down 15 cents at $36.60 a barrel in electronic dealing, not far from a recent 6-year low below $35.
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Light, sweet crude for February delivery fell 79 cents, or 2.1 per cent, to $US35.97 a barrel on the New York Mercantile Exchange.
Kathy Lien, managing director of FX strategy at BK Asset Management, wrote that the USA and Japanese currencies were being bought because “China is in trouble, US data has been disappointing, Japan refuses to increase stimulus and oil prices continue to fall, but everyone’s greatest fear is that stocks have finally peaked”.
On January 4, 2016 three Sunni-led countries – Bahrain, Sudan and the United Arab Emirates – joined Saudi Arabia in severing or downgrading diplomatic ties with Iran, adding to the fraught atmosphere in the region.
“I think this (Brent price low) is a knock on affect from the likelihood that the geopolitical tensions between Saudi Arabia and Iran have put an end to hopes on a deal on oil production”, Hughes told AFP. Canada’s loonie fell to a 12-year low of C$1.402 to the dollar overnight.
Nymex reformulated gasoline blendstock for February-the benchmark gasoline contract-fell 171 points to $1.1447 a gallon, while February diesel traded at $1.0717, 89.99999 points lower. The European benchmark crude was at a premium of 26 cents to WTI.
He says Iran will start producing more than a million barrels of oil a day into the market.
Exacerbating the oil market woes is weakening demand, especially in Asia, home to the world’s No. 2 oil consumer, China, that is seeing the slowest economic growth in a generation. They’re roughly more than 347,000 barrels.
A huge supply overhang and near-record output levels also continued to drag on prices, which have now shed 70 percent in value since the current downturn began in June 2014, causing pain to companies and governments that rely heavily on oil revenues. In theory, when risks rise, so do prices.
Beyond only gradually lifting it exports, Qamsari said Iran wanted to invest into refining capacity to use its crude, but did not give details.
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The American Petroleum Institute is out with its figures this afternoon, while official numbers from the Energy Information Administration are due Wednesday morning. West Texas Intermediate crude futures averaged 48.90 in 2015.
