WTI for September delivery lost as much as 86 cents to $46.26 a barrel in electronic trading on the New York Mercantile Exchange.
Oil prices on worldwide markets sank to six-month lows yesterday ending the trading session just a few cents above the US$45 a barrel on which the T&T national budget is pegged.
Exxon, the biggest U.S. energy producer, reported July 31 its lowest profit since 2009 while No. 2 Chevron posted its worst results in 12 years. “We also had in July the announcement of the nuclear Iran deal, which means there is going to be a return of Iranian oil”, Bell said.
Iran expects to raise oil output by 500,000 bpd as soon as sanctions are lifted and by a mbpd within months, Oil Minister Bijan Zanganeh said in remarks broadcast.
The price of the global benchmark fell 5 percent on Monday, to as low as $49.59 per barrel after it peaked at $52.0, according to official figures.
Money managers cut bets on rising Brent prices last week by the most in more than a year and are the least bullish on U.S. crude since 2010.
Gasoline’s front-month continuation contract settled down nearly 9 per cent from Friday’s close, its most in a day since October 2012, Reuters data showed.
US upstream players like EOG Resources (EOG), Anadarko Petroleum (APC), and ConocoPhillips (COP) are impacted by the lower crude oil prices.
Dealers have been hoping an uptick in US demand, coupled with a slowdown in output, could whittle down the huge global supplies that were a key reason for the collapse in prices from around $120 in June previous year.
“There was this expectation that (the fall in oil prices) would translate into other areas, such as stronger consumer spending, and stronger (company) earnings”, said Jennifer Ellison, a principal at San Francisco-based investment firm Bingham, Osborn & Scarborough.
“A retest of Brent crude’s 2015 low around $45 per barrel looks inevitable given current ample market supply and intensifying bearish market sentiment towards prices”, BMI Research said in a note. At the same time, major investors in Brent crude slashed holdings by the largest margin since September 2014.
Despite this slowing demand, the 101 companies that Barclays cover, are not cutting their production but are planning to increase their output to 1.4 million bpd this year.
U.S. government data Friday suggested that the country’s oil production peaked in March, but the U.S. oil rig count, which is a rough proxy for activity in the industry, rose last week for the third time in the last four weeks, according to Baker Hughes Inc.