“Iran is also expected to increase production as sanctions are lifted,” the agency’s report read. “EIA estimates that Iran has the technical capability to increase crude oil production by about 600,000 b/d by the end of 2016.”
Demand for oil will strengthen this year, according to OPEC, as the cartel said its strategy of pumping oil into the market to squeeze out US producers was taking effect.
The Organisation of the Petroleum Exporting Countries, which pumps a third of the world’s oil, believes demand will average 29.27m barrels per day (bpd) in 2015, representing an increase of 80,000 bpd from its previous prediction.
An upgrade to US oil production and Opec holding firm on output sends the oil price and global markets tumbling
Global financial markets have taken fright at yet more signs that the hammered oil price will not make a swift recovery.
The markets reacted to the US revising its crude oil production upwards for 2015 and signs that the Organization of Petroleum Exporting Countries will maintain production at current levels.