Oil down; China, Wall Street tumble erase early rally on Middle East

During the last two weeks, the impact of OPEC abandoning its production target and the end of the drop in U.S. shale oil production alongside Iran’s approaching return have all been traded into the oil price; consequently, the oil price has fallen below United States dollars 40/bbl.

The conflict between Iran and Saudi Arabia may push crude prices higher due to the threat of instability in the region, industry sources said on Monday. The Energy Information Administration (EIA) reported that crude oil inventories rose 2.6 million barrels in the past week, while gasoline inventories rose 900,000 and distillate inventories rose 1.8 million barrels, so the energy glut is just getting worse despite a mild winter for much of the US and increased holiday travel.

“If OPEC takes Iran that seriously, then so do we”, says Jansson.

Global equity markets fell on Monday on renewed worries about global growth after Chinese shares slid 7 percent slide after weak economic data. The oil producer has guided that it intends to raise its output by at least one million barrels per day by 2H2016, when sanctions against it are finally lifted.

Verdesoto who happens to be the first ambassador of the South American country to Nigeria presented his Letters of Credence to President Muhammadu Buhari at the Presidential Villa in December, 2015.

February NYMEX light sweet crude futures (WTI) was trading at $37.86/bbl, up by $0.82/bbl from the previous close.

Head of global affairs at the National Iranian Oil Company Mohsen Qamsari said on Saturday the increase will depend on market conditions.

Earlier in the session, oil had rallied after a breakdown in diplomatic ties between Saudi Arabia and Iran that some analysts speculated could result in supply restrictions on crude shipments out of the Middle East.

Russian Federation and Opec show no signs of reining in production, leading traders to establish record high active short positions in the market that would profit from further crude price falls.

The immediate outlook for oil prices remains bleak.

“There is no reason why Iran should be importing so many products from South Korea when it shows reluctance in buying Iran’s crude oil”, Ghamsari said.

Saudi Arabia announced the decision yesterday, a day after protesters ransacked its embassy in Tehran over the execution of a Shiite cleric. At full production, Iran is the second-largest OPEC oil producer.

Crude excess on the back of low demand from China forced crude oil prices to touch their 11-year lows last month.

For commodity prices to finally firm up, we need to see manufacturing activity recover in China and other major Asian economies, like South Korea, which saw its exports decline 7.9% in 2015.

The explanation lies partly in robust production from the U.S., Glickman said.