Oil market falls sharply

World oil prices sank by about one dollar today, as supply glut woes grew on the back of rising output from Iran and Iraq.
At about 1615 GMT, US benchmark West Texas Intermediate (WTI) for delivery in June lost USD 1.35 to USD 43.43 per barrel.
Brent North Sea crude for July delivery shed 95 cents to USD 44.88 a barrel compared with yesterday's close.
"This may be a dreaded month for the equity market investors ... But crude oil is having an equally frightening start too," said City Index analyst Fawad Razaqzada.
"Oil prices have also been absorbing a lot of negative news lately - and completely ignoring the fact the markets remain oversupplied with US crude oil inventories being at record-high levels.

"The pressure for a squeeze was building anyway. Iran is continuing to increase oil output following an end to its sanctions in January; Saudi Arabia, unwilling to lose market share to Iran, produces near record levels, and Iraqi oil production is at 30-year highs."

So-called black gold has rallied for the last four weeks thanks to a weaker dollar and hopes that the world economy is slowly turning positive. A faltering greenback makes dollar-priced crude cheaper for buyers using stronger currencies, which tends to stimulate demand and prices.
However, the oil market fell yesterday as figures showed Iraqi exports hit a near-record 3.36 million barrels a day in April, while Iran's production reached 3.5 million barrels per day, the most since December 2011.

Adding to demand concerns, data showed factory activity in world number two economy China slowed in April, leading to fears that a recent series of upbeat indicators may have been a blip.
"Fundamentally, there are no changes (in the supply and demand balance). In fact the situation seems to be getting worse," added IG analyst Bernard Aw.
He said that while the recent rebound seemed "intact", it would be a challenge for prices to return to USD 50 a barrel unless the Organisation of Petroleum Exporting Countries (OPEC) takes firm action to ease the oversupply during its twice-yearly meeting next month.

CMC Markets analyst Margaret Yang said Iran's oil production was likely to hit 4.0 million barrels a day by next month.