– This is the script of CNBC's news report for China's CCTV on January 20, Wednesday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Crude futures slumped again in the Asian trade on Wednesday, with U.S. oil falling to its lowest since September 2003.
Global financial markets seem to be overreacting to falling oil prices and the risk of a sharp downturn in China's economy, Maurice Obstfeld, the International Monetary Fund's chief economist said on Tuesday.
The United Nations announced the removal of Iran's Bank Sepah and its international subsidiary from a sanctions list on Monday.
The move has reignited investor's concern about new Iranian crude entering the oil market.
"Oil prices are at a level where OPEC countries are all struggling. They are selling oil for cashflow not for profit," said Jonathan Barratt, chief investment financial officer at Sydney's Ayers Alliance.
This is a terrible time for the Iranian barrels to come back, but how fast do the Iranians want to bring their oil? RBC Capital Markets' Helima Croft asked on Tuesday on CNBC's "Closing Bell."
"They have about 36 million, 40 million inflows in storage ... they could probably sell that as soon as they want," the global head of commodities strategy noted, saying that it's a question of Iran's own timing.
[ANDREW (t)SU Compass Global Markets CEO ] "061743 You know, we can't afford, and the Saudi Arabia particular, and many countries across the region that cant afford prices this low, purely the last they would want is the Arab spring. We are talking about more austerity measures, we are talking about budgets that can not be balanced at this oil prices close to $100, there's lots of motivation for these countries to work together to stablize prices. 061804 "
The International Energy Agency reported Tuesday that global oil demand growth decreased from a five-year high of 2.1 million barrels per day in the third quarter, to a one-year low of 1.0 million barrels per day in the fourth quarter of last year.
In addition, ample storage space for crude around the world, including 230 million barrels of new storage to be completed this year, will help prevent further sharp price falls but will weigh against significant price rises, according to analysts and industry watchers.
Market watchers are eyeing the Middle East for a possible market share war, and Iran may be undercutting oil prices, but the oversaturation in the crude market is still a concern, Croft said.
CNBC's Qian Chen, reporting from Singapore.