View the article online at http://citywire.co.uk/money/article/a874273
Oil tumbles to fresh lows as Iran sanctions lifted
Prospect of more oil flooding the market following lifting of Iran sanctions sends crude to fresh 12-year lows.
The price of oil has fallen to fresh 12-year lows after sanctions against Iran were lifted, amid the prospect of more crude flooding the market.
Trade sanctions against Iran, which houses the fourth largest proven oil reserves in the world, were lifted on Sunday after the International Atomic Energy Agency said the country had complied with a deal designed to prevent it developing nuclear weapons.
Brent crude fell to $27.67 a barrel, its lowest level since 2013, before mounting a partial recovery to trade at $28.83, down 0.4% on the day.
'The continued weakness in commodity prices, particularly in the oil and gas sector, continues to spook world markets and now that Iran has been given the green light to come in from the cold, it is likely to be difficult to see where the next rebound in oil prices is likely to come from,' said Michael Hewson, chief market analyst at CMC Markets UK.
'There is also the fear that further declines in oil prices are likely to force liquidations from the very investors who have helped push global markets to the levels that they are now, namely the sovereign wealth funds from the Gulf states, as they look to mitigate the sharp falls in revenues closer to home.'
Markets were subdued on the news, with the FTSE 100 trading just five points higher at 5,809 and other global markets in the red. The German DAX 30 was down 0.6%, the French CAC 40 fell 0.3%, Italy's FTSE MIB fell 1% and Spain's Ibex dropped 2.6%.
There were few big movers on the FTSE 100, while on the FTSE 250 it was another bad day for the Woodford Patient Capital (WPCT ) investment trust, down 1.5% at 90.6p as some of its key holdings were hit. Allied Minds (ALML) fell 4.5% to 315p while Circassia Pharmaceuticals (CIRCI) dropped 3.9% to 295.3p.
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