Brent
oil falls below $54 on OPEC output, Iran
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[March 20, 2015] By
Ron Bousso
LONDON (Reuters) - Brent crude oil fell
below $54 a barrel on Friday and was on track for its third straight
weekly loss, hurt by worries of rising supplies from OPEC and the United
States.
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Intensive efforts to clinch a deal between world powers and Iran
over its nuclear programme fed concerns that freeing up its flow of
oil exports would pile more pressure on the market.
Brent for May delivery had fallen 71 cents to $53.72 by 1120 GMT.
The contract is set to decline by more than 1.5 percent this week.
U.S. crude for April delivery slipped 65 cents to $43.31 a barrel,
headed for its fifth weekly loss. The contract expires on Friday.
Kuwait's oil minister said on Thursday that the Organization of the
Petroleum Exporting Countries (OPEC) had no choice but to shun oil
output cuts, reiterating the emirate's view that the group will hold
its course when it meets next in June.
"Oil has been under pressure following remarks by Kuwait's oil
minister and the very slim chance of an approaching deal with Iran,"
said Eugene Weinberg, Commerzbank's head of commodities research.
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"Continuously high OPEC supplies, rising U.S. production and
inventories" meant the market was still looking for a floor, he
said, adding he "wouldn't be surprised" if the current month
contract dropped to around $50 in coming weeks.
The British, French and German foreign ministers are due to meet
Iranian nuclear negotiators in Lausanne on Saturday in the push to
resolve the confrontation.
A deal with Iran could lead to the easing of sanctions restricting
oil exports to around 1 million barrels per day, potentially adding
to a global supply glut.
But Iran was unlikely to be able to raise oil supplies in the short
term even if a deal is struck, according to Amrita Sen, chief oil
analyst at London-based consultancy Energy Aspects.
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The recent strengthening of the U.S. dollar against other currencies
has also weighed on demand for dolar-priced assets, Sen said.
Analysts at Bank of America Merrill Lynch believe oil prices are
unlikely to recover in the near term and will average $52 a barrel
in 2015 and $58 a barrel in 2016.
"This combination of a stronger dollar, a slowing China, and falling
commodity prices is not going away any time soon. As the money runs
dry and governance issues across emerging markets spring up, expect
global oil demand to stay soft," BAML said.
(Additional reporting by Jessica Jaganathan in Singapore; Editing by
Dale Hudson/Ruth Pitchford)
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