Against the backdrop of fears of a massive boost in Iranian crude shipments in the wake of the Islamic nation’s nuclear accord with the West that may pave the way for a removal of sanctions against Iran in the coming months, coupled with record high Iraqi exports, a bump in Saudi Arabian production and an ongoing US shale oil boom, oil prices plunged by 3 per cent in the domestic market on Friday as investors exited risky bets in the energy commodity amid fears over a worsening global supply glut. Iran is estimated to be hoarding 30 million barrels of oil which it plans to release in the market once sanctions are lifted. Meanwhile, US oil drilling rigs rose for the second straight week, signaling an uptick in production ahead. Baker Hughes reported that the numbers of rigs drilling for oil in the US climbed by 5 to 664 last week. A plunge in US consumer sentiment to the lowest level in eight months in July signaled underlying weakness in the world’s biggest economy, clouding the demand outlook for the fuel. The gauge measuring US consumer sentiment fell to 93.1 this month from 96.1 in June. Oil may extend a retreat today after Iran warned that it can boost production by 500,000 barrels per day within a week after a lift-off of international sanctions while tepid China factory data darkened the demand outlook for the fuel. At the MCX, Crude oil futures, for the August 2015 contract, closed at Rs 3,038 per barrel, down by 3 per cent, after opening at Rs 3,121, against the previous close price of Rs 3,132. It touched an intraday low of Rs 3,030.
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