Iran exports news halts 3-week run of price rise for oil

The oil price again fell from three-week high after Iran said that exports are its priority task. This has snapped the longest streak of gain in oil price since April. The oil price is reeling under oversupply pressure.

The trouble-hit Iran is aiming to boost exports after the lifting of sanctions on it. The reiteration on its goal of boosting exports has snapped the longest-run of gains in oil price in the global markets, according to the Iran Oil Minister Bijan Namdar Zanganeh.

According to a report by Bloomberg, oil futures in New York fell 3.2 percent after rising 9.7 percent during previous week. The State-supported IRNA reported that Iran is aiming to promote crude shipments to the level of pre-sanctions. Iran is planning to increase oil exports by 500,000 per day.

Iran is considering a plant to enhance exports to the pre-sanctions level and gearing up to quicken the shipments within a week after sanctions are lifted, said Rokneddin Javadi, head of National Iranian Oil Co, according to Shana news agency.

The local benchmark for over half of the world's oil Brent is set to end 2015 with lowest annual average oil price in 11 years. 

WTI for February delivery fell $1.23 to $36.87 per barrel on New York Mercantile Exchange. WTI was trading at $36.97 in London market. The oil price fell on Monday after consecutive gains for five sessions. The trading was closed on Friday on account of Christmas holiday. The volume of oil futures was 30 percent below the 100-day average as reported by MSN Money.

The West Texas Intermediate (WTI) crude is witnessing second yearly drop owing to the oversupply. The Organization of Petroleum Exporting Countries (Opec) abandoned output limits earlier this month. This will further put pressure on oil price. 

According to BOE Report, Brent for February delivery on London-based ICE Futures Europe Exchange eased by six cents or 0.2 percent to $37.83 a barrel. The European benchmark crude was trading 10 cents lower to WTI. 

Hong Sung Ki, a senior commodities analyst at Samsung Futures Inc in Seoul, said: "If Iran is able to immediately add 500,000 barrels a day of exports, then that will become a huge factor which will push down oil prices in the first half of next year. That decision together with lower demand for heating oil and steady US supplies are poised to be bearish factors for the market."

Chris Weafer, a partner at consulting firm Macro Advisory in Moscow, said: "The promise of a large infusion of Iranian oil at a time when the output from US shale and other non-OPEC producers remains stubbornly high. It'll likely be enough to continue to pull the oil price lower in the coming months. Brent trading below $30 per barrel in the first quarter is now a realistic prospect."