Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. crude closes below $30, as Iran sets to ramp up export level

CommoditiesFeb 02, 2016 02:36PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Both brent and WTI fell sharply on Tuesday to close under $33 a barrel -- U.S. crude fell sharply on Tuesday closing below $30 a barrel for the first time in more than a week, amid reports that Iran could pencil in a line item on its annual budget, which would enable the Persian Gulf state to ramp up its oil exports above the 2 million barrel threshold in fiscal year 2016.

On the New York Mercantile Exchange, WTI crude for March delivery traded in a broad range between $29.82 and $31.52 a barrel, before settling at $29.97, down 1.68 or 2.30% on the day. With the second consecutive major decline, U.S. crude futures erased nearly all of their gains from a five-day winning streak last week when they soared more than 10%. WTI crude is approaching multi-year low from late last month when it slid below $27 a barrel to fall to its lowest level since 2003.

On the Intercontinental Exchange (ICE), brent crude for April delivery wavered between $32.24 and $34.16 a barrel, before closing at $32.76, down 1.47 or 4.31% on the session. North Sea brent crude futures have tumbled more than $3 a barrel over the first two days this week. When brent hit $36 a barrel last Friday, it completed a 26% rally from late-January when the international benchmark fell to its lowest level in 12 years.

Both WTI and brent surged last week following reports that OPEC and non-OPEC producers could meet to craft a strategy to slash global production by as much as 5% per day. The short-lived rally ended, though, after optimism faded that oil powers Saudi Arabia and Russia could arrange such a meeting.

Investors also reacted to reports that Iran is planning to export as much as 2.3 million barrels per day of crude this year, commencing as early as next month. Earlier on Tuesday, the managing director of the national Iranian oil company said government leaders have put the item in a draft bill for this year's fiscal budget, the Shana News Agency reported. Iran's new fiscal year is set to begin on March 21.

The return of Iran to global energy markets is viewed as bearish for global crude, which is awash in a glut of oversupply. Last month, crude prices dipped below $28 a barrel in the wake of an Implementation Day announcement that will enable Iran to ramp up exports by approximately 500,000 bpd over the next several months. The lifting of multi-year sanctions against Iran could allow the nation to increase exports to 2007 pre-sanction levels of 3.4 million bpd once its return is completed.

Crude prices have tumbled more than 70% over the last 20 months from 2014-highs of $115 a barrel, as global supply continues to severely outpace demand.

Energy traders await the release of the American Petroleum Institute's weekly crude stockpile report after the close of trading for further indications on demand strength in the U.S., the world's top consumer. Separately, Wednesday's government report from the Department of Energy could show that crude inventories rose by 4.8 million barrels for the week ending on January 29. A week earlier, crude stockpiles nationwide surged by more than 8 million barrels to remain near their highest levels in at least 80 years.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell mildly to an intraday low of 98.79 before rallying to 98.91 in U.S. afternoon trading. The index remains near 12-month highs from December, when it eclipsed 100.00.

Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

U.S. crude closes below $30, as Iran sets to ramp up export level

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email