Most of the market analysts are expecting in 2016 a gradual improvement in oil prices.
The forecasting is already confirmed, as Iran factor comes to play. Following Riyadh's execution of a Shi'ite cleric the relations between the Middle Eastern rivals Iran and Saudi Arabia deteriorated, leading to a jump of over 2 percent in oil prices in the first trading hours of 2016, on Monday, January 4m as reported by The Star Online.
According to The Straits Times report, on Sunday Saudi Arabia cut diplomatic ties with Iran, in response to the escalating row between the two countries over the execution of the Shi'ite cleric Nimr al-Nimr and the storming of its embassy in Tehran.
Global oil benchmark Brent climbed on Monday more than a dollar to a morning high of US$38.50 per barrel and over 2.5 percent, before easing back to US$38.28 at 0136 GMT. The number was still up US$1, as reported by The Straits Times.
US crude's West Texas Intermediate (WTI) futures were up by 2.05 percent, at US$37.80 a barrel. The number was 76 cents higher than at the opening of the trading session.
Since mid-2014, oil prices were down by two-thirds due to oversupply. The major oil producers pump every day between 0.5 and 2 million barrels of oil in excess of demand.
According to market expert analysts, geopolitics can be among the biggest price drivers in oil.
Since the political risk is high in the present international conjuncture, the oil prices are expected to gradually increase in the year 2016, according to a report published in The Sydney Morning Herald.
Some OPEC-producers hurt by failing prices, such as Venezuela, for instance, are calling for coordinated action in order to cut oil output.
So far, the OPEC group's biggest producers in the Middle East have not shown any will to cut output without a simultaneous reduction by other big players on the market such as Russia. In 2015, oil output in Russia hit a high of 10.73 million bpd in average.
