Futures dropped as much as 1.2 per cent in NY, trading near US$35 a barrel, after losing nearly 11 per cent last week, the most in a year.
Advertisement
“In our estimates, one should hardly expect any serious growth of the oil price above $50”, Oreshkin told a breakfast forum hosted by Russian newspaper Vedomosti on Friday. Market watchers thought as recently as mid-2015 that lower USA production and stronger demand would push prices higher next year, but US output has fallen slower than expected as producers have maintained access to financing and become more efficient.
The US oil price pared earlier loses on Monday as traders started to buy in after the sharp decline of last week.
On Wall Street the mood was equally uncertain, with the Dow Jones Industrial Average 130 points lower in early trading before recovering to be virtually unchanged by noon.
If Brent falls below that level, that will be its lowest since mid-2004 – a year when oil was beginning its surge from the single digits it hit during the 1998 financial crisis and when talk of a commodity super-cycle was only beginning.
On Monday, Brent crude tumbled to a low of $36.33 a barrel, below its close of $36.61 a barrel from December 2008. That’s the lowest level since October 2013.
Nymex reformulated gasoline blendstock for January – the benchmark gasoline contract – fell 3 cents, or 2.5% to $1.2753 a gallon. As a part of the nuclear agreement between Iran and world leaders earlier this year, those sanctions are expected to be lifted.
Tehran is on track to ship 1.26 million barrels a day (bpd) of crude this month, according to an industry source with knowledge of tanker loading schedules.
Joshua Mahony, an IG analyst, said: “Arguably, the correlation between oil prices and the FTSE is as strong as it ever has been, and with oil breaking towards multi-year lows, this is not a good sign for stocks”.
US drivers continue to benefit.
Again Capital partner John Kilduff said the market might have found a bottom. It was established in 2009 and raised $500m (£330m) to invest in high-yield bonds. Wall Street Journal reported on Monday that Rio Tinto, global iron ore major, is ramping up production despite a global iron ore glut as it feels it has a better chance of making money in this market due to the premium its mines command.
Telecom Italia ordinary shares rose 1.9% as a plan to convert saving shares into ordinary stock was seen at risk, after top investor Vivendi said it would abstain from voting in favour of the move.
Weakness during today’s trading session was largely attributed to the statement from the deputy oil minister for Iran, Amir Hossein Zamaninia.
Advertisement
The low cost of fossil fuels, including gas and coal, may be a boon to consumers and businesses who still rely on such energy, but they’re devastating not only to oil companies but also to countries, including Russian Federation, who rely on oil to balance their budgets.
