Standard Chartered warns oil price could collapse to $10 a barrel

It will add 500,000 barrels a day of exports within a week of the removal of sanctions and 1 million within six months, Roknoddin Javadi, head of National Iranian Oil Company said last month, according to the Shana news agency.

However, experts warned that prices remained fragile. The fact that a lower than expected USA crude inventories figure would typically be supportive for oil prices, goes to show that for now the oil market is finding buyers hard to come by in the face of such intense selling’.

United States crude tumbled below $31 a barrel yesterday, extending a sell-off that has sent the commodity to more than 12-year lows, hit by a global supply glut, a strong dollar and tepid demand.

As for production, the EIA notes that the Organization of the Petroleum Exporting Countries (OPEC) will account for most of the growth over the next two years, while non-OPEC production will decline for the first time since 2008 by 0.6 million bpd this year.

Stress reverberated through the markets as U.S. equities reversed early gains to trade in the red as oil prices continued to decline.

In late afternoon deals, New York’s benchmark West Texas Intermediate (WTI) for February delivery tanked to US$30.10 a barrel, which was the lowest level since Dec 2, 2003.

That is while, according to the report, the demand for the cartel’s oil in 2015 is 2.1 mb/d less than the current level.

Prices were little changed from the close after the API was said to report that USA crude supplies fell 3.9 million barrels last week while fuel stockpiles climbed. The industry group also said that gasoline stocks rose by 7 million barrels, while distillate stocks rose 3.7 million barrels.

Consumption in the US has been subdued in recent weeks, as warm weather has limited demand for heating oil and consumers are buying less gasoline than the previous year, EIA data show.

Crude imports for December were 33.19 million tonnes, up 21.4 per cent on the month and 9.3 per cent on the year, well above earlier estimates by Thomson Reuters Oil Research and Forecasts.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 15:30GMT, or 10:30AM ET, Wednesday. Britain’s FTSE 100 index was up 1.25 percent at 1347 GMT, while the dollar rose 0.2 percent against a basket of other currencies. (It’s hard to believe, but it’s been that many trading sessions days since USA oil prices peaked at almost $107 back in June 2014).