Week of December 28, 2015
- On December 18 the US Congress voted to lift a ban on exports of US crude oil originally enacted during the 1970’s oil shortage.
- The news that US oil could now be freely sold on the global market led to reduction of the previous discount for WTI vs. Brent crude.
- Brent crude fell to a six-year low in post-Christmas trading as Iran announced plans to cut prices and boost production. Iran controls the 4th largest reserves of oil in the world.
- Iran exported 2.5m bbl/day before the US imposed sanctions at the end of 2011.
- Sanctions will be lifted early in 2016 and Iran needs oil revenue to rejuvenate its economy.
- Natural gas prices remain weak at around $1.90 per MMBtu NYMEX as mild weather in the US has led to relatively weak seasonal demand for gas.