Abu Dhabi National Oil Co. is another firm that will ramp up production. File Image / Pixabay
U.S. crude fell for a seventh straight session on Tuesday, once again said to be due to the U.S. sanction waivers against Iran being granted earlier this week to 8 countries easing concerns that the oil market will tighten.
West Texas Intermediate crude ended Tuesday's session down 89 cents, or 1.4 percent, to $62.21 per barrel, while Brent fell even further, by $1.27 to $71.90 per barrel.
John Kilduff, founding partner at Again Capital, noted that even though the details of the sanction waivers are still unclear, the inclusion of Japan and South Korea, which had essentially cut their purchases to zero, and the size of China's allotment - it will reportedly be able to import about 360,000 barrels per day (bpd) - caught the market's attention.
Sultan Ahmed Al Jaber, Abu Dhabi National Oil Co.
I think it's only the emotions that are unstable
Another nail in the coffin for analysts who insisted that a calamitous market tightening will result from the Iran sanctions was news on Tuesday from the Energy Information Administration that it now sees the nation's output averaging 12.1 million bpd next year, up from last month's forecast of 11.5 million bpd.
Unsurprisingly, then, Tuesday saw several notable experts declare the global crude market to be solid: Bakhit al-Rashidi, oil minister for Kuwait, told media he expects such stability to continue until the end of the year.
In a similar vein, Sultan Ahmed Al Jaber, chief executive officer of Abu Dhabi National Oil Co., told a Bloomberg New Economy Forum in Singapore that the market in his view is "very robust, solid, and strong, and therefore we....have been very optimistic and in a way bullish."
He added that while the market is very stable, "I think it's only the emotions that are unstable."
Al Jaber went on to note that while he is aware of widespread growth throughout the world, he noted that the growth "experienced here in this part of the world" is "unprecedented", especially "India, China, Japan, South Korea, and Indonesia," and as such his company has taken a "bold" move to expand development and exploration in order to produce 4 million barrels of crude by 2020 and 5 million by 2030.
Earlier this week, the Reuters news agency - which had been giving the global market tightening proposition considerable attention - reported that record high output levels from producing countries combined with "recent weak economic reports out of China and other emerging markets have shifted the conversation back towards worries about oversupply."