In the next two weeks, Japan, South Korea and Russian Federation will see milder than normal temperatures for this time of year while the US, Canada and Europe will be “particularly” milder than normal, according to a note from BNP Paribas published Monday.
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On the Intercontinental Exchange (ICE), Brent crude for January delivery wavered between $36.76 and $38.68 a barrel, before closing at $38.15, down 0.17 or 0.49% on the day.
After OPEC’s decision, both WTI and Brent crude oil benchmarks broke under $40 per barrel. US crude rose 69 cents, or 1.94 percent, to $36.31.
Meanwhile, U.S. Senate negotiators are also allegedly nearing a deal that would allow unfettered crude oil exports for the first time in 40 years.
There’s also anxiety over the potential effects of a widely expected interest rate rise from the United States’ Federal Reserve at its meeting this week, the first rise in borrowing costs in almost 10 year.
Iraq and Saudi Arabia have pumped at record levels this year, while oil market participants are eyeing the appearance of additional barrels from Iran when sanctions linked to its nuclear programme are expected to be lifted next year.
Traders betting on a jump in US crude prices above those in the rest of the world if Congress lifts America’s oil-export ban may be disappointed. It is hard at this stage to judge the impact of this move, but more such bans by hedgies and junk bond funds will create chaos and panic in the market.
On Friday, the Dow sank 1.8 percent and the S&P 500 lost 1.9 percent.
Iran’s exports of crude oil are set to hit a high of six months this month as buyers increase purchases in the expectations that the sanctions against the Islamic Republic will be removed sometime early in 2016.
“There is little urgency or price advantage for USA crude producers to export now”, Morgan Stanley analyst Adam Longson said in a research note.
Iranian news agency Shana quoted on Monday manager director of Iran’s Central Oil Fields Company, Salbali Karimi, as saying Iran’s cost of production stood $1-$1.5 per barrel, in a clear indication its output would remain competitive under any price scenario. “Iran may return to the market in January which is causing concern of increasing oversupply”, said Berentsen.
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Prices have fallen more than 60 percent from levels above $100 in June previous year owing to slack global demand and a slowdown in key markets including China.
