Oil prices could hit record low in 2016 – BP boss

Iran is ready to increase exports to around 2 million barrels per day in the next six months, said Rokneddin Javadi Monday, the managing director of the National Iranian Oil Co.

Oil prices were little changed on Tuesday, one day after plunging more than 3% amid ongoing concerns over a global supply glut. Regardless of headlines, production levels and quota and rumors the fact remains that global stocks of oil are overloaded and it will take years to use the current supplies.

“The Saudi budget… reinforced the “lower for longer” sentiment in that market”, said analyst Augustin Eden at traders Accendo Markets, in reference to OPEC’s Saudi-backed policy of pushing oil prices lower to hurt non-OPEC producers. Prices rebounded despite Saudi Arabia’s planned cuts to 2016 spending that are based on a Brent price next year of $37 a barrel, according to John Sfakianakis, a Riyadh-based economist at Ashmore Group Plc and a former government adviser.

The Iranian President Hassan Rouhani on Thursday ordered to proceed the country’s missile program “with high speed and seriously” and expand Iran’s missile capabilities, in response to the USA sanctions, official news agency IRNA reported.

“Oil prices will fluctuate between $35 and $50 per barrel in the coming years and there will be no worries regarding Iran’s oil income”, he said.

Crude oil rose by Rs 11 to Rs 2,451 per barrel in futures market today as speculators created fresh bets, taking positive cues from the Asian markets. The EIA report is considered more definitive.

Analysts polled by Reuters poll had forecast that U.S. crude stockpiles fell 2.5 million barrels last week.

Both Brent and WTI crude are down over two thirds since prices started dropping in June 2014 amid the U.S. Shell oil boom and OPEC’s decision to continue pumping near-record volumes of oil to push out higher-cost rivals. The surprise action in the energy sector has been the soaring price of natural gas, which just a week ago was close to a 20-year low below the $2 level.

Oil prices are widely expected to stay low through at least the first half of 2016, as high global inventories and robust production in the U.S., Saudi Arabia and elsewhere keep the market oversupplied. “The inventory data is likely going to be the most important set of news that we would be seeing this week”, Daniel Ang, an analyst with Phillip Futures in Singapore, said in a market commentary.