However, according to Interfax News Iranian oil minister Bijan Zangeneh has indicated his nation's willingness to come out swinging in the global war for crude market share, oil prices be darned.
Mr. Zangeneh told CNN that by the end of 2016 Iran will increase production to 4.2 million bpd, which is a 1.4 million bpd increase over its current production rate. Only time will tell whether or not Iran can accomplish its lofty production growth goals, and what kind of effect that will have on crude prices, given the hundreds of other variables that affect global oil markets.
One thing is clear however, Iran plans to become a much bigger player within OPEC and that means US energy investors need to be prepared for 2016 to be another potentially painful year for short-term share prices.
Rich Smith : I've got my eye on the oil storage market. We've been hearing for months -- years even -- about how oil storage tanks were filling up with drilled but unsold oil. But a recent report out of the U.S. Energy Information Agency just highlighted yet another new peak.
According to US EIA , U.S. oil inventories are now at levels "not seen for this time of year in at least the last 80 years." That could be a problem for oil prices, because we're entering the time of year where refineries historically have tried to top up their tanks in preparation for the winter chill. With oil already near to overflowing the tanks, however, there may soon be no place to put the oil that producers are presumably planning to produce -- which could give them an incentive to lower prices just to push the oil out the door.
Now, there are alternatives to this: Building more storage tanks, for example, or storing oil in offshore tankers. But the supply of tankers is limited, and most of the storage tanks now under construction to alleviate the "storage glut" aren't expected to become operational before mid-next-year. Congress is also considering lifting the 40-year-old ban on exporting most domestic crude oil. But again, even if that happens, it's not likely to happen till next year.
All in all, it's shaping up to be a turbulent next three-to-six months for the U.S. oil industry. Investors' best hope may be for a long and cold winter.
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The article 4 Oil Trends to Be on the Lookout For in 2016 originally appeared on Fool.com.
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