Oil slips from 3 week high on prospect of Iran exports

Date

12/29/2015 6:36:04 PM

(MENAFN- Khaleej Times)

Oil slid from the highest level in three weeks snapping the longest run of gains since April as Iran repeated its goal of boosting exports after sanctions on the country are lifted.

Futures in New York lost 1.8 per cent after climbing 9.7 per cent last week. Iran's priority is to boost crude shipments to pre-sanction levels state-backed IRNA reported citing Oil Minister Bijan Namdar Zanganeh.

The nation plans to add 500000 barrels a day of exports within a week after sanctions are removed said Rokneddin Javadi head of National Iranian Oil Company according to Shana news agency.

The global glut that's sent West Texas Intermediate crude toward its second yearly decline may deepen after the Organisation of Petroleum Exporting Countries (Opec) effectively abandoned output limits earlier this month.

Brent is poised to end 2015 with the lowest annual average price in 11 years hurting oil-exporting countries and companies.

"If Iran adds as much as it plans to the already oversupplied market there is definitely less hope for the market in the first half of next year" Hong Sung Ki senior commodities analyst at Samsung Futures said. The country's export ambitions "will become a driver for lower prices" he said.

WTI for February delivery lost 69 cents to $37.41 a barrel onthe New York Mercantile Exchange and was at $37.42 by 9.50am in London. The most-active contract fell for the first time in five days. Prices rose 60 cents or 1.6 per cent to $38.10 on Thursday the highest since December 4. Trading was closed on Friday for the Christmas holiday. The volume of all New York oil futures traded was about 40 per cent below the 100-day average.

Brent for February settlement lost 72 cents or 1.9 per cent to $37.17a barrelon the London-based ICE Futures Europe exchange.Prices are down 17 per cent this month the biggest drop since July. The European benchmark crude traded at a 19-cent discount to WTI.

Iran sees potential for a further drop in crude prices as the nation plans to boost its supplies amid lack of Opec cooperationsaid Javadi who is also the country'sdeputy oil minister.

The Middle East producer has reached agreements with buyers and plans to increase overseas shipments by one million barrels a day within six months of sanctions lifting.

The Opec abandoned its formal output target in its December 4 meeting as it attempts to drive higher cost producers from the market. That is adding to the glut that is also hurting its own members.

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