Iran Sees Oil Prices Continuing To Slide

Brent crude oil fell below $97 on Wednesday morning as ample supply and waning demand continued to weigh.

The commodity traded at $96.94 at 8:20 GMT with weak economic data driving prices.

Oil prices have been largely unaffected by the growing tension in the Middle East where the U.S. and its allies have begun air strikes in Syria.

The strikes, which the Pentagon has said are just the beginning, are said to have destroyed several key buildings used by Islamic militants as command centers and weapons storage. 

Instead, investors focused on eurozone PMI data which showed that the region’s business activity fell short of expectations in September. Manufacturing and services PMI in the bloc’s two largest economies, France and Germany, also waned.

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The data added to growing concern that global demand will not be able to catch up to rising supply, thus creating an even larger supply glut.

So far, OPEC has been optimistic about oil prices, saying that the market’s natural ebb and flow will help boost prices in the future. However on Tuesday, The Wall Street Journal reported that the director at National Iranian Oil Company took an opposing view.

Mohsen Ghamsari said he sees oil prices falling to $90 by April 2015 due to the imbalance in supply and demand. Ghamsari’s remarks came just days after Saudi Oil Minister Ali al-Naimi said he is not concerned about the recent drop in prices and that OPEC is not considering a supply cut.

In any case, investors will be watching the group closely as its November meeting approaches for any indication that a supply reduction is coming. Many of the group’s members require prices to be above $100 in order to balance their budgets, so a forecast of $90 could warrant a cut.