There was not much movement in the market over the long holiday weekend. This morning we can see WTI crude trading down $1.08 at $37.02, its first decline in three days. This could be in part due to Iran repeating its goal of increasing crude exports the moment the sanctions are lifted. RBOB is currently down $.0273 and heating oil is down $.0121, while the spread between gas and diesel continues to hover around 15 cents, with gas being a premium to diesel.
As Iran plans to boosts its exports of oil into a global supply glut there is potential for prices to drop even further. Iran is expected to add around 500,000 barrels a day initially. "If Iran adds as much as it plans to the already oversupplied market, there is definitely less hope for the market in the first half of next year," Hong Sung Ki, senior commodities analyst at Samsung Futures Inc. in a phone interview by Bloomberg.
News, or speculation, about the export potential of domestic crude when the export ban is lifted, helped lift NYMEX WTI over London's ICE Brent crude for the first time since mid-2010.
When crude fell 50% to $50-a-barrel drilling rigs laid off workers, focused on their best rigs while shutting down the smaller ones, and employed new technology in order to squeeze every last drop of oil they could out of the ground. These efforts worked. However, with oil going into the New Year trading down around $35, the EIA predicts U.S. shale companies will cut production by 570,000 barrels a day in 2016.