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MTECHTIPS:-Oil prices sink to new lows as collapse continues
Oil prices sank to the lowest level since 2003 in North America trade on Wednesday, as ongoing concerns over a global supply glut continued to weigh. Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share. Oversupply issue will be exacerbated further as Iran plans to return to the global oil market after western-imposed sanctions were lifted earlier this month. Analysts say the country could quickly ramp up exports by around 500,000 barrels, fueling fears over increased supplies amid a global supply glut and slowing demand. Crude oil for delivery in March on the New York Mercantile Exchange tumbled to a session low of $28.35 a barrel, a level not seen since September 2003, before recovering to trade at $28.46 by 15:30 GMT, or 10:30AM ET, down $1.11, or 3.75%. A day earlier, Nymex prices dropped 82 cents, or 2.7%. New York-traded oil futures are down nearly 24% since 2016 began. Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer. The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show crude stockpiles rose by 3.0 million barrels in the week ended January 15. The reports come out one day later than usual due to Monday’s public holiday in the U.S.
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