World oil prices tumbled to new 12-year depths on Monday after the West lifted sanctions on Iran, paving the way for higher crude exports from the Islamic Republic.
Brent crude tumbled below US$28 ($40.30) a barrel in Asia trading hours to reach a fresh 2003 low point on fears about a worsening global supply glut.
But the market then found brief support, rebounding above US$29 on bargain-hunting and as Opec hinted at a more rebalanced market, beginning this year.
Half a million barrels of Iranian crude is set to be added to already saturated markets after US and European leaders ended a crippling embargo put in place over Tehran's nuclear programme.
The news led to further selling of black gold, whose prices have slumped by about three quarters in value since mid-2014 owing to the supply glut, record output levels, weak demand growth and a slowing global economy led by China.
But the Organisation of the Petroleum Exporting Countries (Opec), of which Iran is a member, said Monday that it expects a "rebalancing process" as the sharp fall in oil price causes production from non-cartel competitors such as the United States to fall after seven years of "phenomenal" growth.
If the prediction is accurate, it would make a victory of sorts for Opec's strategy of keep the oil flowing despite crude sliding from above US$100 in 2014 - to defend its market share.
On Monday, Brent tumbled to as low as US$27.67 a barrel - a level last seen in November 2003.
New York prices also hit a low of more than 12 years at US$28.36.
In volatile trading, they then shot above US$29 a barrel, before easing back slightly.
"The drop was due to the Western sanctions on Iran being lifted," said Phillip Futures analyst Daniel Ang.
"This means we will be seeing a bigger oil glut with Iranian crude exports coming back to the market." Mr Ang added that prices had rebounded on bargain-buying.
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Brent crude tumbled below US$28 ($40.30) a barrel in Asia trading hours to reach a fresh 2003 low point on fears about a worsening global supply glut.
But the market then found brief support, rebounding above US$29 on bargain-hunting and as Opec hinted at a more rebalanced market, beginning this year.
Half a million barrels of Iranian crude is set to be added to already saturated markets after US and European leaders ended a crippling embargo put in place over Tehran's nuclear programme.
The news led to further selling of black gold, whose prices have slumped by about three quarters in value since mid-2014 owing to the supply glut, record output levels, weak demand growth and a slowing global economy led by China.
But the Organisation of the Petroleum Exporting Countries (Opec), of which Iran is a member, said Monday that it expects a "rebalancing process" as the sharp fall in oil price causes production from non-cartel competitors such as the United States to fall after seven years of "phenomenal" growth.
If the prediction is accurate, it would make a victory of sorts for Opec's strategy of keep the oil flowing despite crude sliding from above US$100 in 2014 - to defend its market share.
On Monday, Brent tumbled to as low as US$27.67 a barrel - a level last seen in November 2003.
New York prices also hit a low of more than 12 years at US$28.36.
In volatile trading, they then shot above US$29 a barrel, before easing back slightly.
"The drop was due to the Western sanctions on Iran being lifted," said Phillip Futures analyst Daniel Ang.
"This means we will be seeing a bigger oil glut with Iranian crude exports coming back to the market." Mr Ang added that prices had rebounded on bargain-buying.
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