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Practical World True News Magazine
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Practical World True News Magazine

Markets : Oil price keeps sliding, now at $35 US a barrel

Crude prices continued their slide today, the first trading day after the worst week for oil all year, was trading below $35 US a barrel at one point on Monday morning.


The price of a barrel of West Texas Intermediate lost almost a dollar to change hands at $34.68 a barrel at one point on Monday morning, before recovering somewhat to trade just above the $35 level — less than a dollar off its recession low, when it closed at $33.94 in February 2009.

Oil has been battered by a constant barrage of negative outlooks. The latest catalyst is weekend comments from Iran's deputy oil minister that there is "absolutely no chance" the country will hold off on production to keep prices up while it re-enters the market.

Oil's problem has hinged on oversupply, a situation that would be exacerbated when Iran is once again allowed to start selling oil to the world, after the UN lifts sanctions, sometime in 2016, that have banished the country from selling oil due to its nuclear activities.

Once sanctions are lifted, a few million more barrels of oil will flow into the market daily. The oil market is currently oversupplied to the tune of about three million barrels a day.

Iran's deputy oil minister said his country is eager to start selling oil again at any price, as it needs revenue.

"The price can drop as low as possible as we are prepared for the worst scenario," Hossein Zamaninia said.

The loonie, which is closely tied to the value of oil, held up fairly well despite oil's slump, hovering just under 73 cents, but slightly up on the day.

The same couldn't be said of the TSX, however, which lost another 160 points to 12,630. That's the lowest level since October 2013.

"The tone is clearly negative today, but not nearly as negative as it was when you had a $34 handle on WTI, that was a key pivot point," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
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