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November 15, 2018

Oil falls as market braces for more Iranian supply

US crude oil futures fell in Asian trade on Friday, heading lower after posting the first significant gains for 2016 in the previous session, as the prospect of additional Iranian supply looms over the market.

West Texas Intermediate was down 48 cents at $30.72 a barrel at 0345 GMT. On Thursday the contract rose 72 cents, or 2.4 per cent, to settle at $31.20. It hit a 12-year low of $29.93 earlier this week.

WTI is on track to post a third consecutive weekly loss, down more than six per cent. The contract is down nearly 18 per cent from a 2016 high on January 4.

Brent crude was down 20 cents at $30.68 a barrel. The global benchmark settled up 72 cents, or 2.4 per cent, at $31.03 a barrel on Thursday, after falling to $29.73, its weakest since February 2004.

Over the previous eight sessions, Brent had lost about $7 a barrel, almost 20 per cent.

Western sanctions on Iran are expected to be lifted within days, potentially paving the way for more crude oil exports from the country, under a landmark agreement on Tehran's disputed nuclear programme.

"This is three or four months ahead of what the market was thinking last year, so it just adds fuel to the fire," said Tony Nunan, Oil risk Manager, Mitsubishi Corp in Tokyo.

Any additional oil from Iran would add to the glut that has pushed oil prices into a deep slump since the middle of 2014.

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