Oil prices fall: Iran exports surge, US adds oil rigs
After oil producers reduced oil exports, Iran increased exports so oil prices fell instead of increasing.
After oil producers reduced oil exports, Iran increased exports so oil prices fell instead of increasing.
OIL & ENERGY PRICES
Oil prices fall: Iran exports surge, US adds oil rigs
9/01/2017
Reuters News agency
Oil prices fell on Monday unexpectedly.
Global oil producers recently reached an agreement after negotiations to reduce the global oil supply thereby increasing oil prices and also their profits.
Iran, which was exempted from the supply cut agreement, has thwarted their efforts.
After the other oil producers reduced their oil exports, Iran increased its exports.
This undermined efforts by the other oil producers to reduce supply and increase prices.
US oil drillers also undermined the agreement by increasing their activity for a 10th straight week.
A very large oil tanker known as a super-tanker (Source: Wikipedia)
IRAN TAKES OPPORTUNITY TO SELL OFF OIL STOCKS
Oil traders say lower prices on futures contracts (for future delivery of oil) were a result of rising exports from Iran that came just as other members of the Organisation of the Petroleum Exporting Countries (OPEC) cut supplies in an effort to end a global oil glut and the low oil prices that are benefiting consumers.
Iran has sold more than 13 million barrels of oil held on tankers at sea, capitalising on an OPEC output cut deal from which it was exempted to regain market share and court new buyers, according to industry sources and data.
Oil platform used to drill for oil in offshore oil fields (Source: Wikipedia)
US ENERGY COMPANIES ALSO ADDING OIL RIGS
Iran's surging tanker exports weren't the only indicator of plentiful oil supplies.
US energy companies last week added oil rigs for a tenth week in a row, extending a recovery in activity into an eighth month.
Crude prices remain at levels at which many oil drillers can operate profitably.
Rising US drilling activity and output is likely to keep prices in check and prevent them from rising much.
Drillers added four oil rigs in the week to Jan 6, bringing the total count to 529, the most since December 2015.
As a result of the increased drilling, US oil output has risen by over 4% from its 2016 low to almost 8.8 million barrels per day, although production remains 8.74% below its 2015 peak.
http://www.bangkokpost.com/news/world/1176961/oil-down-as-iran-exports-surge-us-adds-more-rigs
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