Pakistan cancelled Defence Minister Khawaja Asif’s visit to Iran on Friday, and instead, both the Prime Minister and the Chief of Army Staff are scheduled to travel to Iran and Saudi Arabia on Monday, in the hopes of mediating the conflict between the two Middle Eastern powers.
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“Earnings results, which so far have hurt petrochemical stocks with some bright spots for some banks and food producers, are being largely ignored because oil and the overall gloom in global equities are taking over”. “The downward movement in oil prices was exaggerated due to the current environment that we are seeing in the financial markets”. The sanctions, which severely curtailed the amount of oil Iran was allowed to export, were completely lifted when the U.N.’s nuclear watchdog announced Saturday that Tehran had met its commitment to curtail its nuclear program.
“Implementation Day for the nuclear agreement means a new oil day for Iran”, Daniel Yergin, vice chairman of research firm IHS and author of a Pulitzer Prize-winning book on the history of oil, said Sunday.
While this could trigger sudden price jumps once traders close positions to cash in from further drops, it also indicates that many market participants think there is still more downside to prices. The contract dropped $1.94, or 6.3 percent, to $28.94 on Friday.
Meanwhile, a type of low-quality American crude oil is now being sold at a “negative price”. Profits are plunging, jobs are being slashed and dozens of oil companies have filed for bankruptcy.
The news led to further selling of black gold, whose prices have slumped by about three-quarters since mid-2014 owing to the supply glut, record output levels, weak demand growth and a slowing global economy led by China.
Saudi Oil Minister Al-Naimi declined to comment yesterday when asked how the removal of economic sanctions against Iran might affect prices.
“Iran has quite a large storage of oil at the moment”, Spooner told AFP.
LONDON/SINGAPORE – Oil prices hit their lowest since 2003 on Monday, as the market braced for additional Iranian exports after the lifting of sanctions against the country over the weekend. But the IEA estimates that 400,000 to 500,000 barrels a day is more likely; some experts see 300,000 or so barrels coming in during the next six months.
It’s hard to know precisely what shape Iran’s oil fields are in.
“If you track Iran’s rhetoric over the past 12-18 months, officials were projecting a 1 million bpd rise in exports as soon as sanctions were lifted”, said analyst Virendra Chauhan at Energy Aspects, adding that the most recent downgrade in the number is indicative of the challenges that face Iranian upstream and the markets capacity to absorb its supply.
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Iran is a member of the oil cartel OPEC.
