“The second reason that the oil market may have bottomed out is that the waivers on Iran sanctions are set to expire in May,” according to OilPrice.com. “The latest data from Reuters shows that the volume of imports by Asian countries of Iranian crude hit a low in December at 664,800 bpd, down 12.7 percent from a year earlier. However, countries such as South Korea and Japan have indicated that, with waivers from the U.S. Treasury in hand, they could buy more oil from Iran beginning in January.”
There are expectations that U.S. shale production could grow by 1.2 million barrels per day this year, but if that number is missed it could act as a de facto production cut, potentially helping oil prices along the way.
On Wednesday, Direxion Daily S&P Oil & Gas Exploration & Production Bull 3X ETF (NYSEArca: GUSH) rose 5 percent on rising oil prices despite lingering concerns over rising production and a weakening global economy.
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