Moody’s slashes oil forecast for 2016 by $10 a barrel

Natural gas prices also tumbled to 14-year lows.

Oil prices have slumped to levels last seen during the global financial crisis as the Organisation of Petroleum Exporting Countries (Opec) effectively abandoned production limits to defend market share, fuelling a record surplus.

Iran’s return to the oil market may be giving OPEC leader Saudi Arabia another reason to keep pumping oil at an all-out pace.

The U.S. benchmark settled up 69 cents, or 1.9%, at $36.31 a barrel, after falling to as low as $34.53 a barrel.

Crude-oil futures have been facing severe headwinds since past year, when prices for the USA and global benchmarks shed more than half their value from the highs seen in June 2014.

Brent for January settlement dropped as much as 66 cents, or 1.7 per cent, at US$37.27 a barrel on the London-based ICE Futures Europe exchange.

This seasonal weakness is compounding a structural oversupply as 0.5-million to 2-million barrels of crude a day is produced in excess of demand.

Brent crude’s renewed slide below $40 per barrel was the damning verdict on OPEC’s failure to agree on a number even for what is largely a notional output target, analysts of the British economic research and consulting company Capital Economics said in a report obtained by Trend. “In addition to volumes released from storage, Iran will be able to increase crude oil and condensates exports by a maximum of 700,000 b/d by end-2016”.

“Nerves are fraying ahead of the Fed’s expected decision to lift USA rates on Wednesday”.

WTI’s financial crisis low was $32.40 in December 2008. The U.S. Federal Reserve is likely to raise interest rates for the first time in nearly a decade later this week. This comes according to one industry source that has knowledge of the loading schedules of tankers.

Oil prices extended losses in Asia on Monday on fears that a global supply glut will last another year, with analysts saying the Paris climate deal likely will have no near-term effect on the commodity.

Oil produced in the United States fell below $35 a barrel in early trading, although the price recovered somewhat in the hours afterward to reach $35.27.

SINGAPORE – Oil prices dipped on Tuesday, with Brent set to extend its losing streak to an eighth day, as investors remain concerned about a global glut and mild winter demand that sent prices close to 11-year lows during the previous session.