BIg Week For Oil Prices With A Slew Of Data Due

The huge decline in Chinese exports along with a serious decline in Japanese current account figures, are weighing on oil prices as lower demand by two of the major users is weighing on the prices. Crude oil declined 28 cents to 43.60 while Brent oil is down 29 cents to 48.95. Lower demand is just a small factor on oil prices. The global supply glut is the heaviest pressure on the energy product sector. This week traders will see a slew of economic reports for oil production.

Later today the U.S. Energy Information Administration releases its Drilling Productivity Report, showing estimates for oil and gas output from the biggest shale formations. On its heels on Tuesday The EIA publishes its Short-Term Energy Outlook with forecasts for oil, natural gas, power prices and supply. If that isn’t enough just before will be the big OPEC report.  The OPEC Monthly Oil Market Report, including July production figures from Saudi Arabia and Iran will be released at mid-day.

Oil prices are crumbling again, declining nearly 20 percent during July taking price well below the $50 a barrel mark in the key international market. A massive global supply glut amid weak demand is depressing the prices. The battle for market share between U.S. and Saudi Arabia has created wide swings in prices recently. From a peak of $107 a barrel in June 2014, NYMEX oil prices plummeted more than half posting a low of $43.46 in March. Prices recovered to $61 a barrel, but lost ground and crashed to a low of $43.58.

Prices declined on surge in gasoline stockpiles in the United States as the summer season, the country’s biggest demand period for motor fuels, neared its end.

Iranian Oil Minister Bijan Namdar Zangeneh said the country could lift production by 500,000 barrels a day within a week of the lifting of sanctions and by one million barrels a day within a month after that.

This is a serious concern as Iran has a lot of market share to recover with the second-largest barrel-per-day output in OPEC before the sanctions were enforced. Although there are glut concerns, only a few producers have shown any signs of cutting back in response to low prices, and have tried to sustain their operations through cost-cutting measures such as trimming their workforce.

Oil production is outpacing demand globally following a shale gas boom in the U.S. and the decision of oil producing countries to keep their production intact. Moreover, glut is to deepen with more crude oil to hit the market after Iran and six world powers reached on a consensus over the nuclear deal, which will end the sanctions imposed on the former.

Record exports from Iraq and robust production from Saudi Arabia is adding pressure on prices. Recent crash in Chinese equity market increased worries over demand from the second top consumer of oil is also making the commodity cheaper. A strong dollar too hurt prices as it makes oil more expensive for buyers in other currencies.