LOC12:49
09:49 GMT
KUWAIT, Aug 4 (KUNA) -- Asian oil prices had slightly recovered on Tuesday's trading after dropping by five percent last night due to growing tension over expected growth in gloabl production.
OPEC, which contributes by 40 percent to the total production rate, had recorded its highest input level last July.
The organization's rate is expected to rise as Iran is set to increase its production level up to 500,000 barrel per day, once the international sanctions are lifted.
Later on, Iran is planning to increase production to one million barrels per day.
The drop in oil prices was caused by several factors including a record rise of US oil production and slow economy growth in China, the world's second largest energy consumer.
Last night, oil prices had recorded their lowest rate within six months, where Brent crude fell below USD 50 per barrel for the first time since January 2015.
Meanwhile, the prices had dropped by USD 11.39 pb (18.6 percent) last July, amidst fears of a big rise in production rates once Iran had resumed its oil exports. The country had reached a deal within the same month with 5+1 group on its nuclear file, aiming to lift international sanctions.
Reports on an increase in Iraq's exports and a rise in Saudi Arabia's production had also affected prices. Moreover, the rise in oil shale production created a higher rate of production compared to the oil demand level.
Another factor affecting prices was the high exchange rate of the US dollar against the main currencies in July, recording its highest level in three months with expectations of a raise in US profit rates.
The rise in the US dollar led crude oil to be higher in cost for investors using other currencies, thus keeping downward pressure on prices in the coming months. (end)
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