Oil under pressure as Iran orders sharp rise in crude
output Oil prices had briefly stabilized in the previous session, but only
after hitting the lowest since 2003 as western sanctions against Iran were
lifted, allowing the country with the world's fourth-largest oil and gas
reserves to return in full to the market. Oil futures remained under pressure
in early trading on Tuesday, following a slide that has seen prices fall by
more than a quarter since the beginning of the year, as the full return of Iran
to oil markets adds to an already huge supply overhang. Oil prices had briefly
stabilized in the previous session, but only after hitting the lowest since
2003 as western sanctions against Iran were lifted, allowing the country with
the world's fourth-largest oil and gas reserves to return in full to the
market. Prices came under pressure on Tuesday morning as Iran ordered a sharp
increase in oil output to take immediate advantage of the lifting of sanctions.
"It is clear that investor sentiment is driving oil prices... Bearish bets
are at their highest level since 1983, indicating heightened concerns around
Iran oil flooding the market," ANZ bank said on Tuesday. Sanctions had cut
Iran's oil exports by about 2 million bpd since their pre-sanctions 2011 peak,
to little more than 1 million bpd. With the prospect of a lifting of sanctions
becoming increasingly clear since the beginning of the year, a price rout that
started in mid-2014 accelerated, pulling crude down over 70 percent in 18
months. US crude futures CLc1 were trading at USD 29.00 a barrel by 0105 GMT,
down 42 cents from their last settlement. Front-month Brent crude futures
LCOc1, though up a notch just after opening Tuesday's trade, remained below USD
29 per barrel at USD 28.69 per barrel. "The run up to this weekend's
announcement has likely contributed to the recent decline in oil prices,"
Goldman Sachs said. "We have been assuming that production will rise by
285,000 barrels per day year-on-year in 2016," it added. Most traders expect………….
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