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SINGAPORE (Reuters) – Oil prices tumbled on Wednesday, prolonging their losses from the previous session, as markets are well supplied by rising production and US sanctions waivers that allow the biggest clients to sell their oil. Iran to continue buying crude.
PHOTO FILE – Iraqi villagers drive their fishing boat in front of oil tanker Al-Baath in the Shat-al-Arab waterway, which leads to the port of Umm Qasr, near the country's second largest city, Basra, February 10, 2005 REUTERS / Atef Hassan
The Brent crude futures contract at the beginning of the month, LCOc1, was $ 71.85 per barrel at 0115 GMT, down 28 cents (0.4%) from their last close.
The futures price of WTI (West Texas Intermediate) CLc1 US crude futures was $ 61.76 per barrel, down 45 cents or 0.7% from their latest settlement.
The market, which is increasingly well stocked, has transformed the sentiment that, until early October, was largely bullish, pushing Brent to an unprecedented high of more than 86 dollars a barrel for four years, before the sanctions imposed by Iran.
Brent and WTI lost 17.4% and 19.7% respectively of their value since their most recent highs in early October.
The US bank JP Morgan said that "part of the recent oil sales were due to excessive crude oil on the physical markets … due to high production of OPEC while the price of oil was high. Iranian supply was still on the market despite the reduction in reported exports. "
Fawad Razaqzada, market analyst at Forex.com, said that he had become "pretty bearish on oil prices" because of weaker demand growth expectations, a larger supply and of a lifting of the sanctions of Iran.
According to Refinitiv Eikon data, Iran's crude oil exports fell to 1 million barrels per day (bpd) in November, compared to nearly 2 million bpd in October and about 3 million bpd in mid-2018.
GRAPHIC: Iranian Oil Exports – tmsnrt.rs/2PabBPs
US bank Morgan Stanley said that "the fundamentals of the oil market have eased (as (s)) stocks still higher than expected, especially those of the OPEC of the United States, the Middle East , from Russia and Libya ".
Production of the world's top three producers, Russia, the United States and Saudi Arabia, surpassed 33 million bpd for the first time in October, meaning that these three countries alone represent more than third of the nearly 100 million bpd of global consumption.
Iraq, the second largest producer in the Organization of Petroleum Exporting Countries (OPEC) behind Saudi Arabia, is targeting a production capacity of 5 million bpd in 2019, compared to 4.6 million bpd currently, said Tuesday the Minister of Petroleum, Thamer Ghadhban.
"The market is well stocked and we expect a balanced rather than a small market. That's no longer our forecast of $ 85 a barrel and our forecast for the first half of 1985, "said Morgan Stanley.
Instead, the bank said it expects Brent to average about $ 77.5 a barrel by mid-2019.
With production rising, stocks are increasing.
US stocks of crude rose 7.8 million barrels during the week ending Nov. 2 to 432 million, according to data from the American Petroleum Institute published Tuesday.
Despite the well-supplied market, Razaqzada warned that it would be "increasingly expensive for inefficient producers to maintain their production at current levels".
Venezuela's gross output was in "free fall" and may soon fall below one million barrels per day, International Energy Agency Executive Director Fatih Birol warned Tuesday against more than $ 2 million. barrels per year on average.
GRAPHIC: Production of Crude Oil from Russia, United States and Saudi Arabia – tmsnrt.rs/2CTwqaq
Report by Henning Gloystein; Edited by Joseph Radford
