Oil Prices hit lowest levels in 11 years Wednesday January 06,2016

 

Oil fell to its lowest in more than 11 years on Wednesday January 06,2016, down around 2 %, as the row between Saudi Arabia and Iran was seen extinguishing any chance of major producers cooperating to cut production in the face of mounting global over supply.

The furore over Saudi Arabia’s execution of a Shi’ite cleric has depressed the market as it put an end to speculation that OPEC members could agree on production cuts to lift prices.

Global Brent crude benchmarks were at $35.75 a barrel at 0856 GMT, down 67 cents or 1.9 percent from their previous settlement, their lowest since 2004.

U.S. crude futures were down 46 cents at $35.51 per barrel after already slipping 79 cents the previous day.

Oil has slumped from above $115 in June 2014 as shale oil from the United States has flooded the market, while falling prices have prompted some producers to maximise output to prevent income falling too rapidly and keep market share.

Adding to this oversupply, Iranian oil exports are widely expected to increase in 2016 as Western sanctions against the country for its alleged nuclear weapons programme are likely to be lifted.