Article by ForexTime
The International Energy Agency warned on Tuesday that the oil market “could drown in oversupply” as a rise in Iranian output offsets production cuts elsewhere, threatening a further price collapse.
As a result, oil prices reacted to the IEA report and the gains oil made in US trading on Tuesday proved unsustainable. West Texas Intermediate, the US oil benchmark, traded as low as $27.92 a barrel early on Wednesday, trading near the lowest since September 2003.
Brent, the international benchmark, was down 0.5 per cent at $28.61. On Monday, Brent traded below the $28 mark for the first time also since September 26, 2003.
The world’s leading energy forecaster said slower demand growth and an increase in oil ouput from Iran now that sanctions had been lifted would pressure oil prices.
Global oil stocks rose by 1bn barrels in 2015 from the year before and the IEA has forecast a further increase of 285m barrels over the course of 2016.
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Article by ForexTime
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