Oil price drop to $30 per barrel as Iran begin delivery to Europe
The price of the oil dropped once again to $30 per barrel after Iran delivered its first shipment to Europe. Iran began shipping oil to Europe following the removal of international sanctions on its refineries. In addition, China's import of crude oil also plunged from a record high.
In January, import from China fell nearly 20% over last month, Bloomberg quoted an official data. Futures in West Texas Intermediate dropped 0.5% in the New York trading following a 12% increase on Friday. Meanwhile UK Brent also slipped 0.5%.
On Sunday, an oil tanker was loaded for Total SA at Kharg Island and that the tankers hired for Spanish and Chinese firms were expected to reach the Island on late Sunday, an officer from the oil ministry of Iran told Bloomberg. New York oil market is 21% low in the current year amongst a robust forecast for Iranian exports. According to BP Plc, the oil industry will continue to remain "tough and choppy" during the initial six-month period of 2016 as it struggles with an additional 1 million barrels per day.
On the New York Mercantile Exchange, March West Texas Intermediate (WTI) delivery slipped as high as 49 cents to $28.95 per barrel. The deal earned $3.23 and closed the Friday trading session at $29.44, compared to a fall of 19% in the last six sessions. Last week prices of WTI lost 4.7%.
For April, UK Brent fell as high as 69 cents to $32.67 per barrel and the deal jumped $3.30 to end Friday trading at $33.36, while the European yardstick crude was at $1.53 for April. Total SA, Compania Espanola de Petroleos and Lukoil PJSC have reserved cargoes to carry oil from Iran to ports of Europe, as per the Bloomberg shipping data.
According to Professor Emmanuel Nnadozie, the present drop in oil prices should be treated as a chance for the nation rather than an economic disaster, allAfrica reports. He said that this is the time for Nigeria to tackle the hurdles in economic change, industrialization, modernization in agriculture and diversification. Nnadozie advises Nigerian government to boost the nation's business atmosphere and to invest in rail and energy sector.
The fall in oil prices have made an adverse impact on many nations and regions like Colombia, Mexico and Brazil have increased their interest rates. Azerbaijan is facing protests against the fading economy of the nation and even the GCC nations are trimming their budgets and are planning for privatization, TheNational said. Last year, the oil industry in the world lost over 250,000 workforces and nearly 100,000 were reported in Canada alone.
Major energy importers like India, Bangladesh, Germany, Spain and Pakistan may escape the malady in the oil market, while for energy producers this oil price fall is not sufficient to overcome their other economic hurdles. However, idealists expect to find a hint of hope somewhere in the current slowdown of the oil market.
The removal of sanctions from Iran has contributed to the oil price fall as the global oil sector is ailing with an additional supply of oil barrels from the nation. This fall is seen as a boon for some nations while it is considered as a disaster for others.