Oil prices crash to below $30 per barrel
Brent reaches lowest level since February 2004, while WTI dips to new low since November 2003
Oil prices reached record low levels early Friday, as rout continued on Chinese stock exchanges, and traders worried about Iran's sooner-than-expected return to the oil market.
The price of the international benchmark Brent crude oil declined 4.1 percent early Friday. After opening the day at $30.98 per barrel, Brent crude fell as low as $29.71 per barrel before 9:30 a.m. GMT, marking its lowest level since February 2004, according to official figures.
The American benchmark West Texas Intermediate (WTI) decreased 5 percent on the New York Mercantile Exchange (NYMEX), from opening at $31.18 per barrel to as low as $29.61 a barrel, its lowest level since November 2003.
The decline in prices came after the Chinese stock market Shanghai Composite Index declined 3.55 percent on Friday to 2,900.97 points.
The volatility and losses in the Chinese stock market, coupled with the slowdown of the world's second-biggest economy, continue to create expectations in the global oil market that crude demand gtp, the world's second-largest oil consumer would fall, bringing oil prices down.
In addition, the bearish sentiment in the oil market is still strong due to global oversupply and concerns that Iran's expected return to the oil market could come sooner than most had anticipated.
The U.S. Secretary of State John Kerry announced Wednesday that Iran could fulfill its nuclear obligations "within days" and can begin to receive sanctions relief on the implementation day of the Joint Comprehensive Plan of Action, which he said is going to take place "very soon."
Tehran has repeatedly stated, since inking the final nuclear deal with the world power P5+1 group on July 2015, that it is planning to increase its oil production by 500,000 barrels a day once the sanctions are lifted. Iran also wants to raise production by another 500,000 barrels a day within the next six months after the sanctions lift.
On top of the potential addition of an average of one million barrels a day of crude supply, the country is also estimated to have more than 30 million barrels of oil stored offshore that is ready to hit the global market immediately after sanctions are removed.
Additional physical crude from Iran is expected to increase the supply glut in the global market rapidly, and push oil prices to new record low levels -- many experts now predict a drop to about $20 per barrel.
