Oil stays under pressure as Iran orders sharp rise in crude output
By Henning Gloystein
SINGAPORE (Reuters) - Oil futures remained under pressure on Tuesday following a slide that has seen prices fall by more than a quarter since the beginning of the year as the full return of Iran to oil markets adds to an already huge supply overhang.
U.S. crude futures were trading at $29.14 a barrel by 0249 GMT (9.49 p.m. ET on Monday), down 28 cents from their last settlement.
Front-month Brent crude futures remained below $29 per barrel at $28.84 per barrel after rising slightly in Tuesday's trade.
Traders said that the diverging movements between Brent and WTI crudes was largely due to technical trading in order to get the two benchmarks back slightly closer together.
The U.S. premium over Brent hit its highest level since 2010 on Monday as Iran's oil will be exported to Brent-priced Europe and Asia while regulations still restrict it from going to the United States.
The U.S. government has also revoked a 40 year old ban on its crude reserves, resulting in oil flows out of the U.S. crude price zone and into Brent.
Prices fell to their lowest since 2003 on Monday as western sanctions against Iran were lifted. Tehran then ordered a sharp increase in output to take immediate advantage.
"It is clear that investor sentiment is driving oil prices... Bearish bets are at their highest level since 1983, indicating heightened concerns around Iran oil flooding the market," ANZ bank analysts said in a note on Tuesday. Continued...