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Oil price falls again as Shell shareholders prepare to vote on mega-merger with BG Group

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The price tumbled as much as 3 per cent during trading yesterday when it emerged Iraq had produced a record high of oil and may even raise output further.

The news comes as the market is already braced for more supply from Iran after sanctions were lifted. 

Tankers have begun to leave Iran’s ports and it agreed its first deal with a European company last week with Greece’s refinery Hellenic Petroleum. 

Some analysts expect Iran to increase production to between 3million and 4million barrels a day. Iraq’s fields produced more than 4.1million barrels a day.

Oil prices collapsed to below $28 a barrel last week from $115 mid-2014 high due to a supply glut caused by members of the oil cartel Opec maintaining record production amid the growth of the US oil shale sector. 

Brent Crude oil is at a 12-year low at below $31 a barrel.

Despite the low oil price the £36billion cash and share merger of Shell and BG looked set to go ahead. Over the past weeks a number of top shareholders have said they will back the deal.

Shell’s shareholders vote tomorrow and BG’s the day after.

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