Oil prices go down in the midst of supply overhang

The Bank, Morgan Stanley on Monday said that a global supply overhang was unlikely to be around till 2017 "We see limited upside for Brent (and range-bound) pricing over the next 12 months as the supply overhang is worked off,"

On Monday crude oil prices fell because of concerns in the market over a supply overhang together with a meeting between Saudi- Arabia and Venezuela that seemed to be futile.

Olivier Jakob an oil analyst at Petromatrix said: "There’s still a lot of concerns about the state of the crude oil stocks in the United States,” According to data from the Energy Information Administration (EIA), U.S. crude and gasoline inventories hit record highs

The Bank, Morgan Stanley on Monday said that a global supply overhang was unlikely to be around till 2017 "We see limited upside for Brent (and range-bound) pricing over the next 12 months as the supply overhang is worked off,"

The meeting on Sunday between Saudi Arabia's oil minister Ali al-Naimi and his Venezuelan counterpart, Eulogio Del Pino, which indicated that OPEC and non-OPEC suppliers were ready to meet to discuss the price slump. Al- Naimi was quoted saying:"It was a successful meeting and (led) in a positive atmosphere," Meanwhile Pino described it as “productive”.

PVM Oil Associates analyst David Hufton said on Monday: "The chances of a deal are slim now but will increase if prices stay around $30 a barrel, which they will if Iran and Iraq come through on their intended volumes,"

After the lifting of sanctions Iran might be clawing its way back into the oil market. Iranian Oil Minister Bijan Zanganeh was quoted by the ministry's news agency SHANA on Saturday as saying that France's Total (TOTF.PA) agreed to buy 160,000 barrels per day (bpd) of Iranian crude for delivery in Europe. He added that Italy's Eni (ENI.MI) was interested in buying 100,000 bpd and Italian refiner Saras (SRS.MI) was interested in buying 60,000-70,000 bpd. Iran might also be considering taking stakes in refineries in six countries to guarantee sales of its crude oil; SHANA quoted Hamid Sharif Razi, managing director of the National Iranian Oil Engineering and Construction Company, as saying on Monday.

On Wednesday a testimony of U.S. Federal Reserve Chair Janet Yellen is also expected together with U.S. crude inventory data from the EIA. OPEC as well as the EIA are expected to release their monthly reports during this week.

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