The price of OPEC basket of thirteen crudes stood at 25.00 dollars a barrel on Thursday, compared with $25.69 the previous day, according to OPEC Secretariat calculations.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
Meanwhile teh BBC reports that oil prices have fallen below $30 a barrel for the second time this week.
It comes as concern grows that Iran could restart oil exports flooding a market already under intense pressure from global oversupply and weak demand.
Brent crude fell more than 4.5% to $29.46 and USWest Texas intermediate oil fell to $29.47.
Iran could restart exports if the International Atomic Energy Agency (IAEA) reports it has complied with measures to curb its nuclear programme.
The IAEA could publish its report as early as Friday, following a meeting in Vienna.
Iran has the fourth largest proven oil reserves in the world, according to the US Energy Information Agency and any additional oil would add to the 1 million barrels a day of over supply that has led to a more than 70% collapse in oil prices since the middle of 2014.
“With sanctions on Iran likely to be lifted, more oil is flooding the markets,” Commerzbank analysts wrote in a note.
“Although the additional supply had been imminent for some time, current sentiment ought to send prices further south.”
Commerzbank cut its 2016 forecast for oil prices, changing its year-end expectation for Brent to $50 per barrel, down from a previous forecast of $63.
Iran’s oil exports were already on target to hit a nine-month high in January, with 1.10 million barrels a day of crude, to load.
Why is the oil price so low?
Oil prices have fallen by about 70% in the past 18 months as supply has outstripped demand. The demand for oil from China has fallen as its economic growth has slowed. Meanwhile supply has increased, partly due to the rise of US shale oil. In addition, the world’s largest exporter of oil, Saudi Arabia, has refused to cut production – something it has done previously to support oil prices. Analysts estimate that about one million barrels of oil are being produced above demand every day.
Consumers and some businesses have benefitted from lower oil prices. UK motorists have seen the price of petrol and diesel fall from about £1.40 a litre 18 months ago to about £1 now. Transport operators and airlines should also be benefitting from cheaper fuel. The lower fuel costs have also helped to keep inflation close to zero in many countries.
Oil exporting nations that rely on a higher oil price to break even are suffering, such as Russia, Nigeria and Venezuela, as are oil firms generally. There have been thousands of job losses in the North Sea’s oil industry. Investment in exploration has also been cut by big oil firms such as Shell, BP, Total and Exxon Mobil.
Iran is expected to target India, Asia’s fastest-growing major oil market, as well as its old partners in Europe, such as Greece, with the increased exports.
It is the wrong time for Iran to be returning to the oil market, both for the market and likely also for Iran,” brokers Phillip Futures said in a note on Friday.
The continuing collapse in oil prices has also added to pressure on oil producing nations that rely on exports including Algeria, Venezuela, Nigeria and Russia.
Earlier this week, Russian Prime Minister Dmitry Medvedev warned tumbling oil prices could force his country to revise its 2016 budget.
He said that the country must be prepared for a “worst-case” economic scenario if the price continued to fall.
Taxes from oil and gas generates about half the Russian government’s revenue.
The 2016 federal budget that was approved in October was based on an oil price of $50 a barrel in 2016 – a figure President Vladimir Putin has since described as “unrealistic”.