The March futures price for Brent crude oil mix up to 28 dollars per barrel, during the auction it was down to up 27.71 per barrel.
MOSCOW, 18 Jan. The world prices for oil at the auctions on Monday decrease, Brent crude oil is trading around $ 28 per barrel due to rising fears of investors about an impending increase in the oversupply on the oil market after the return of Iran in connection with the withdrawal on Saturday of sanctions by the EU and the US, according to AFP.
As of 08.25 Moscow time the March futures price for North sea petroleum mix of mark Brent has decreased on 2,27% to 28,57 USD per barrel. In the course of trading on Monday the price of Brent crude oil fell below 28 dollars per barrel for the first time since January 2003, up 27.71 per barrel. The price of March futures for WTI crude oil fell by 0.97% to 30.09 per dollar per barrel, exceeding the price of Brent crude oil.
Saturday, January 16, Iran got rid of the majority imposed on the country of sanctions – on this day, the IAEA presented a report confirming the readiness of the authorities to implement it through a long negotiation program by a significant reduction of its nuclear potential. Later the EU and the US confirmed the removal from Iran of economic and financial sanctions related to its nuclear program. Market participants now fear that the Iranian side will be able in the next few weeks to increase supplies of oil to 500 thousand barrels per day for several weeks, exacerbating investors ‘ concerns related to excess supply in the market.
Since the beginning of summer 2014 to the end of last year, oil prices have fallen more than tripled — from 115 to 36 dollars per barrel of Brent, and in 2016 already dropped below $ 30. In addition to such fundamental factors causing the decline in prices, as high level of production in a world with slower demand, including because of the situation in China, such a deep fall experts have been increasingly linked to financial factors, including the strengthening of the dollar. In forecasts they are generally single — low oil prices for a long time.
“The recognition that any additional production will prolong the presence of excess supply in the market grows. Oil prices are falling because of concerns about demand. Impact on all markets investor concerns over the situation in China increases worries about global economic growth”, — said the Agency Bloomberg analyst at Citi Futures-Tim Evans (Tim Evans).
