Oil edges closer to $28 as Brent and WTI crude both drop thanks to end of Iran sanctions
Oil investors were showing their nerves today, with the price of both Brent crude and WTI crude edging closer to $28, as sanctions against Iran were lifted, potentially adding millions of barrels of oil to an already oversupplied market.
Brent, the global benchmark, dropped to $28.17 in early trading, while the US-focused WTI fell to $28.71.
The two slid more or less consistently throughout last week, as the reality of the lifting of sanctions on Iran began to bite.
The country has the world's fourth-largest crude oil reserves, and claims it can boost production by almost half a million barrels per day "almost immediately".
The news has caused hedge funds to pile into short positions, Accendo Markets' head of research Michael van Dulken said.
Analysts at Barclays suggested a glut in supply might not be the only problem to hit the market this week.
"New-year woes are now being compounded by preliminary data suggesting demand is weaking sharply as well," they said.
