Oil rises after hitting 2003 low on lifting of Iran sanctions

“It is too early to say what kind of market impact Iran’s return will have or how much of Iran’s return is already priced in”, they wrote. Therefore it will take “more, rather than less time for oil production to normalize”, said Commerzbank’s Weinberg.

Oman, which is not a member of the Organization of the Petroleum Exporting Countries (OPEC), said it was not anxious by the prospect of extra Iranian supply because the market was already awash with oil but said it was ready to cut output.

The increase is possible now that Iran is unfettered by sanctions on its crude exports, the ministry’s news agency Shana reported Monday, citing comments by Roknoddin Javadi, managing director of state-run National Iranian Oil Co. Benchmark Brent crude was trading at around $29.25 at 1220 GMT.

Dubai’s economy stands to benefit from the lifting of sanctions against Iran because the emirate is a hub for Iranian business.

If the prediction is accurate, it would make a victory of sorts for OPEC’s strategy of keep the oil flowing despite crude sliding from above $100 in 2014 – to defend its market share. JBC Energy GmbH expects Iran to boost output more slowly, by 255,000 barrels a day in 2016, it said in an e-mailed note. “It is not worth holding a direct exposure to crude oil at present, before more clarity sets in”.

Lost production could offset a 300,000-barrel-per-day increase by Iran, Verleger said.

Depending on your viewpoint, i.e. whether you are long oil stocks or are a heavy consumer of petrol, Dr Nikos Paltalidis, a lecturer in finance at Durham University Business School, has a decidedly pessimistic outlook.

Oil in floating storage is 40-m bbls (though 40% is thought to be crude), with similar volumes on Kharg Island which could hit crude markets within 1-2 months.

Well, at least it is not the bucks a barrel that some gloom-mongers are predicting.

Oil prices have come under relentless pressure since the start of the year due to worries over the Chinese economy, hurting commodity-dependent economies such as Russian Federation.

OPEC left its 2016 global oil demand growth forecast little changed, predicting global demand would rise by 1.26 million bpd, marking a slowdown from 1.54 million bpd in 2015. State budgets were dependent on oil prices of 70 dollars (a barrel).

Oil hasn’t been this low since 2003 and the market braced for additional oil from Iran to hit the market following the country being freed of sanctions. “As a result, many companies will declare bankruptcy”. “The oil market is seemingly facing its final washout while transitioning into a new normal”.