 "Investors wary of Iran's plan to expand oil supply")
Investors are losing faith in an oil-price recovery next year, as Iran prepares to add more crude to a global glut. That's good news for US drivers who have enjoyed the lowest gasoline prices in six years.
Oil fell to the lowest level in about six years on December 21, amid speculation suppliers from the Middle East to the US will exacerbate a glut as they fight for market share. Iran, which expects sanctions over its nuclear programme to be lifted by the first week of January, has secured customers for its planned supply expansion, an Iranian oil official said this month. US pump prices have followed crude oil lower, giving consumers extra money to spend during the holidays.
"There's every reason to be bearish," said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group. "As we approach the end of December, there's more attention being paid to the expected return of Iranian barrels adding to the glut in supply."
The average price of regular US gasoline slipped to $1.998 a gallon on December 20, the first time below $2 since 2009, according to Heathrow, Florida-based AAA.
Iranian priority
Iran's priority is to boost shipments to pre-sanction levels, Oil Minister Bijan Namdar Zanganeh said, according to the state-backed IRNA news agency. The nation sees the potential for further oil-price declines as it plans to boost supply amid a lack of the Organization of Petroleum Exporting Countries (Opec), said Roknoddin Javadi, head of National Iranian Oil, according to the Shana news agency.
The Iranian government plans to add 500,000 barrels a day of exports in a week of the removal of sanctions and one million within six month, said Javadi, who is also the country's deputy oil minister. "There are fundamental elements that will put downward pressure on the market during the new year," said John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy. "The supply and demand outlook is negative."
Speculators' long positions in WTI fell by 3,198 contracts to 259,181 futures and options, CFTC data show. Shorts rose 3.4 percent to 172,258, just short of the all-time high reached earlier this month. Net-long positions fell 9.2 percent to 86,923.
Brent crude
Money managers cut their bullish bets on Brent crude during the period. Speculators reduced net-longs 3.4 percent to 166,034 contracts, according to data from ICE Futures Europe.
In other markets, net bearish wagers on US ultra low sulfur diesel decreased 5.3 per cent to 39,172 contracts. Diesel futures slipped 5.2 per cent in the period. Net bullish bets on Nymex gasoline slipped 9.7 percent to 21,385 contracts as futures declined 5.6 per cent.
WTI climbed to a three-week high on December 24 after US crude oil inventories declined and drillers idled rigs. Stockpiles should move higher in January because Gulf Coast refiners curb deliveries at the end of the year to reduce local taxes, Kilduff said.
"I wouldn't be surprised if we start the year with an initial run to $40 before running out of steam," Kilduff said. "The first half of the year will be tough. I think we should make new lows and drop below $30 when the refinery maintenance season begins."
Oil fell to the lowest level in about six years on December 21, amid speculation suppliers from the Middle East to the US will exacerbate a glut as they fight for market share. Iran, which expects sanctions over its nuclear programme to be lifted by the first week of January, has secured customers for its planned supply expansion, an Iranian oil official said this month. US pump prices have followed crude oil lower, giving consumers extra money to spend during the holidays.
"There's every reason to be bearish," said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group. "As we approach the end of December, there's more attention being paid to the expected return of Iranian barrels adding to the glut in supply."
The average price of regular US gasoline slipped to $1.998 a gallon on December 20, the first time below $2 since 2009, according to Heathrow, Florida-based AAA.
Iranian priority
Iran's priority is to boost shipments to pre-sanction levels, Oil Minister Bijan Namdar Zanganeh said, according to the state-backed IRNA news agency. The nation sees the potential for further oil-price declines as it plans to boost supply amid a lack of the Organization of Petroleum Exporting Countries (Opec), said Roknoddin Javadi, head of National Iranian Oil, according to the Shana news agency.
The Iranian government plans to add 500,000 barrels a day of exports in a week of the removal of sanctions and one million within six month, said Javadi, who is also the country's deputy oil minister. "There are fundamental elements that will put downward pressure on the market during the new year," said John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy. "The supply and demand outlook is negative."
Speculators' long positions in WTI fell by 3,198 contracts to 259,181 futures and options, CFTC data show. Shorts rose 3.4 percent to 172,258, just short of the all-time high reached earlier this month. Net-long positions fell 9.2 percent to 86,923.
Brent crude
Money managers cut their bullish bets on Brent crude during the period. Speculators reduced net-longs 3.4 percent to 166,034 contracts, according to data from ICE Futures Europe.
In other markets, net bearish wagers on US ultra low sulfur diesel decreased 5.3 per cent to 39,172 contracts. Diesel futures slipped 5.2 per cent in the period. Net bullish bets on Nymex gasoline slipped 9.7 percent to 21,385 contracts as futures declined 5.6 per cent.
WTI climbed to a three-week high on December 24 after US crude oil inventories declined and drillers idled rigs. Stockpiles should move higher in January because Gulf Coast refiners curb deliveries at the end of the year to reduce local taxes, Kilduff said.
"I wouldn't be surprised if we start the year with an initial run to $40 before running out of steam," Kilduff said. "The first half of the year will be tough. I think we should make new lows and drop below $30 when the refinery maintenance season begins."