Brent Crude Prices Hit 11-Year Low

Crude price is set to come under further pressures as new barrels are expected to enter the market from Iran, the United States and Libya.

U.S. crude futures dropped 31 cents to $34.42 a barrel, their lowest since 2009.

WTI for delivery in January lost 33 cents to $34.40 a barrel.

Opec, led by Saudi Arabia, will stick to its year-old policy of compensating for lower prices with higher production, and shows no signs of wavering, even though every dollar lower in the oil price brings fresh pain to its poorer members.

Last week, the USA active oil rig count rose by 17 to 541, underscoring the strong resilience of U.S. shale producers to keep pumping despite low prices.

Brent futures LCOc1 traded up 29 cents $36.64 a barrel at 0917 GMT, recovering from an 11-year low of $36.04 hit on Monday.

U.S. Federal Reserve Chairwoman Janet Yellen announced a decision to raise interest rates last week.

What this implies is that Nigeria budget planners may have to again re-adjusts the provisions in the Appropriation Bill to avoid huge deficit gaps despite prospects of a likely price rebound, as predicted by analysts, as from June next year.

Energy Aspects also expects the market to rebalance towards the end of next year but said in a report today that “the pace of inventory drawdown will depend on OPEC output”.

“The resilient production data reflect rising USA crude stockpiles, which have surged to 491 million barrels, the most for this time of year since 1930”, ANZ bank said. Its deficit forecast, because of the oil price and falling ruble, was 1 trillion rubles ($14.4 billion).

Iran has been calling on OPEC to cut production as the country plans to ramp up its production to normal levels with the lifting of sanctions in the near future. “It’s not exactly looking as if there is light at the end of the tunnel any time soon”.

North Sea production from Britain and Norway is expected to rise this year because of new fields coming on stream and lower than usual maintenance outages, JBC Energy analysts said. Russian Federation receives 44 percent of its revenues from selling hydrocarbons, so the current price of oil leaves many questions for Russian Federation for 2016. Spain’s main stock market index, the Ibex 35, closed at its lowest for three months following a 3.6% fall on fears that a second election might be needed to form a stable government in Madrid.