Oil prices dropped by 3% due to concerns over rising Iraqi oil exports and increasing US output.
Editor’s Remarks: The price tumble is due to expectations that record levels of crude oil exports from Iraq, OPEC’s second-largest oil producer, and a rally in US production will both go towards undermining OPEC’s attempts to reduce global supply. There is widespread belief that oil is in oversupply worldwide in light of the large falls in prices in recent times. The Iraqi government has insisted that the OPEC agreement will hold despite high output from the south of the country. However, the cuts required for this would have to come from northern Iraq, causing many in the oil industry to be sceptical of its feasibility.
What to watch: Brent Crude Futures, OPEC, Iraq Oil Ministry