Oil prices fall as nuclear deal paves way for Iran exports

Created: 15 July 2015

A nuclear deal between Iran and six world powers sent oil prices lower on Tuesday, but any further selloff depends on how successfully Iran can raise production and sell the oil In the face of competition.

The possibility of up to a million new barrels of Iranian oil flooding global markets – the amount Iranian official’s aim to delivery within months – comes at a critical time. China’s stock-market turmoil in recent weeks could slow an economy that was expected to account for a lot of energy-demand growth. U.S. production remains strong, and oil giants such as Iraq and Saudi Arabia are pumping record amounts.

On any given day, the world already produced more than two million barrels a day more than there is demand for, according to the International Energy Agency, which monitors oil-and-gas data for industrialised nations.

“Iran’s efforts to raise oil exports could not have come at a worse time, given the market’s lingering oversupply,” said Michael Cohen, an energy analyst at Barclays.

In 2012, the U.S. and European Union imposed strict sanctions on Iran’s energy and financial sectors, and the country’s oil exports have been cut nearly in half as a result, according to the U.S. Energy Department. Iranian exports averaged 1.4 million barrels a day in 2014, down from 2.6 million barrels a day at the end of 2011, federal data showed.

“One question is how quickly can they bring oil to the market, the other is how quickly can they market it with the current price wards?” said Bijan Khajehpour, a consultant who follows the Iranian oil industry.

Mr Khajehpour figures that once Iran is allowed to sell its oil freely, it has some 20 million barrels in storage that it can deliver as soon as it has buyers. After that, the country can almost immediately ramp up production by roughly another 400,000 barrels a day from fields where the flow oil has slowed. Following that, Iranian engineers may be able to pump a further 500,000 barrels a day within a year or so by restarting wells that were shut down.

Most investors expect Iranian oil exports to increase by 100,000 to 300,000 barrels a day this year, according to a June survey of 299 investors conducted by Morgan Stanley. Nearly half of the investors surveyed predicted an increase of 400,000 to 600,000 barrels a day from current levels by the end of 2016.

Ed Morse, global head of commodities research at Citigroup Inc, said despite Iran’s confidence that it can ramp up exports by a million barrels a day, “the market is going to be unkind to them in making room to market that much oil that quickly.”

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British export of meat on the rise!

Created: 13 July 2015

The British Poultry Industry has stepped up its contribution to the UK’s economy. Exports of poultry meat were up 6.6% last year, from £286m to £305m, mainly on sales to other EU countries.

Sales of chicken within the UK increased 13% to £6.9 billion making it the country’s most popular meat ahead of beef, lamb and pork combined. Employment in the sector increased a total of 79,300, up 8% year-over-year.

However, the UK does still import more poultry meat than it exports.

These figures have recently been published in a report, commissioned by the British Poultry Council. The report found that the sector as a whole contributed £3.6 billion to the nation’s GDP, up from £3.3 billion in comparison to 2013, the report says.

However, the UK still imports more chicken than it exports, mainly due to the fact that imports are for premium breast meat while exports are more lower-value dark meat cuts.

BPC chairman John Reed thinks there are still significant growth opportunities in the future, especially for exports. Referring to the TTIP-negotiations, he warns that, “Any trade agreements must also reinforce the commitment of the UK industry to a ‘farm to fork’ hygiene approach and ensure a level playing field on production standards.”

BPC chief executive Andrew Large added that the industry needs to be able to upgrade its capital assets to meet the growing demand.

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