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A
milestone nuclear deal reached on Tuesday between six world
powers and Iran will mean sanctions that have limited sales of
Iranian oil for several years are likely to be lifted in early
2016.
An official at the National Iranian Oil Company said on
Wednesday that Iran's oil production can increase by
500,000-600,000 barrels per day (bpd), confirming the prospect
of a ramp-up in supply from a nation that holds some of the
world's largest oil reserves.
Iran can reach its pre-sanctions level of 4 million bpd within
six to twelve months if there is enough demand, he said.
Most analysts agree that first Iranian oil exports could enter
the global market in early 2016, but their estimated additional
volumes vary between 300,000 and 700,000 bpd.
Analysts at Goldman Sachs estimate Iran could supply and extra
200,000-400,000 bpd in 2016 on top of a release of 20-40 million
barrels from floating storage.
"We view the 2016 prospects for higher OPEC production,
including from Iran, as a growing downside risk to our oil price
forecast," Goldman Sachs analysts said in a note to clients.
Goldman's current forecast is for Brent to average $58 a barrel
in 2015 and for $62 next year, while it expects U.S. crude to
average $52 and $57 respectively this year and next year.
By 1104 on Wednesday Brent crude was down 50 cents at $58.01 a
barrel. U.S. futures fell 35 cents to $52.69.
Iran, a member of the Organization of the Petroleum Exporting
Countries, exported almost 3 million bpd of crude at its peak
before Western sanctions reduced shipments to about a million
bpd over the past two and a half years.
Traders are also keeping an eye on China for clues to the health
of the economy. A savage correction shaved about 30 percent off
the country's stock market in the past month before Beijing
support measures helped to stem the tide.
China, one of the world's top energy consumers, reported stable
economic growth on Wednesday at an annual rate of 7 percent.
French bank Natixis said there was a risk of oil prices falling
further if China's economy slows while global oil production
stays close to record highs.
(Additional reporting by Henning Gloystein in Singapore; Editing
by Christopher Johnson and David Goodman)
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