INVESTORS will be closely watching oil prices this week, after Iran revealed that it expects to raise oil output by 500,000 barrels per day (bpd) as soon as sanctions are lifted and by 1m bpd within months.
Iranian oil minister Bijan Zanganeh said yesterday: “Within the next few months, we will return to the level of 3.8m-3.9m barrels. We are not asking anybody’s permission to get our rights back.”
In addition, the US rig count for oil rose by 26 per cent over the past two weeks, according to data out over the weekend, indicating an increase in domestic supply over future months.
US crude prices posted their largest monthly decline since the 2008 financial crisis on Friday, ending down 21 per cent.
Data from the US Commodity Futures Trading Commission shows that hedge funds and other speculators have slashed their bullish exposure to US crude to the lowest levels since September 2010.
Meanwhile, Brent crude oil fell to as low as $51.63 on Friday, reversing the recent rally which took the commodity up to close to $70 per barrel.