“Crude futures are turning lower again on oversupply woes and profit-taking, reversing from last week’s surge on short-covering and fuel demand triggered by freezing weather in parts of the northern hemisphere,” Seeking Alpha reports.
Iraq’s oil ministry told Reuters on Monday January 25th oil output had reached a record high in December. Its fields in the central and southern regions produced as much as 4.13 million barrels a day, the government said according to Reuters.
The oversupply will keep markets depressed and prices low, and on the other hand short positions are in excessive territory,
said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
Greece’s largest refinery Hellenic Petroleum has agreed to buy oil from the National Iranian Oil Co., marking the first sale of Iranian crude to a European country since the lifting of trade sanctions against the Middle Eastern nation.
On the other hand the chairman of Saudi Aramco thinks that oil prices would ultimately balance at a moderate level as demand continued to rise.
So how low can oil prices go? Gary Shilling, a US consultant, last year suggested
prices could drop as low as $10 per barrel!
So far Gary’s projection goes in the right direction. Do you believe the bottom is actually at $10 a barrel?
Please feel free to share your comments below.