Tehran urges OPEC to reduce crude output to boost prices

The United States crude benchmark was down $1.10, or 2.3%, at $45.20 a barrel on the New York Mercantile Exchange. In 2016 Brent and WTI prices, according to the analysts’ expectations will reach $60 and $55 a barrel respectively.

Oil prices fell as a key United States report showed stockpiles rising more than expected, adding to a bearish backdrop amid a global glut of crude. Inventories probably climbed by 3.5 million barrels last week before an Energy Information Administration report on Wednesday.

China’s GDP growth slowed to 6.9 per cent in the third quarter, down on a 7 per cent rise in the prior quarter, while implied oil demand was also lower, official figures and Reuters data on Monday showed. “This would likely be weighing down on commodity usage in China”, including oil, said Daniel Ang of Phillip Futures in Singapore in a market commentary.

Weak demand from emerging nations and an increase supply from the largest producing countries has caused oil prices to drop significantly over the last year.

The global Brent contract was down 81 cents, or 1.7%, at $47.90 a barrel on the ICE Futures Europe exchange.

With ex-Soviet oil producers, including Russia and Azerbaijan, unlikely to bow to pressure to reduce output in an effort to lift prices there is little chance of a deal between the two sides, industry experts said. The U.S. House of Representatives voted in favor of ending the ban, though the White House suggested it would veto the measure.

Today, the Iranian Leadership has stated that it would increase its oil exports to the West by 500,000 bpd immediately on the first day of the lifting of sanctions and in the next few years will increase its exports up to over 5 million bpd.

Distillate stockpiles, which include diesel, fell by 2.6 million barrels. “The bottom line is what’s happening in products is more of a function of better cash markets, not a change in fundamentals”, said Scott Shelton, energy broker and commodities specialist at ICAP.

Oil futures improved from their overnight lows on Tuesday, as traders moved past lackluster economic data from China to focus on supply.

Gupta said the market will be looking at a December 4 policy-setting meeting of the Organisation of the Petroleum Exporting Countries which is expected to “provide vital clues about price development in the medium term”.