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Oil starts off the week at 2004 lows (Brent: $36.1)

Brent oil price broke below the technical trading level of $36.2 this morning and is now at 2004 lows as market sentiment continues the bearish path.

On Friday, the weekly oil rig count from Baker Hughes showed a surprise gain in active drilling rigs of 17 to 541, indicating that U.S. oil producers continue production despite low prices.

Near-record production from Russia (above 10 mio. barrels per day) along with comments from Iraq over the weekend that OPEC will continue current high output without limits contributed to the expectation of ample oil in the market. Saudi Arabia crude oil exports in October increased by 253,000 barrels per day compared to September - total production was also higher (10.276 mio. barrels per day) compared to September (10.226 mio. bpd).

The U.S. crude export ban was lifted on Friday along with other energy policy changes. The ban was originally implemented in the early 1970s after an oil embargo resulted in oil price and inflation increases globally.

On the economic data front, today has no major market movers; only this morning's German inflation data which showed a decline of 0.2%; negative for the 4th month in a row. Tomorrow and Wednesday see a row of U.S. economic data releases ahead of Thursday and Friday being Christmas Eve and Day respectively. The weekly oil inventory data from American Petroleum Institute and Energy Information Administration will be published as usual this week and will be followed closely since last week showed surprise builds in crude oil inventories.