Oil prices fell on Tuesday as traders assessed the impact on supply of peace talks between Russia and Ukraine, as well as US-Iran talks, high physical demand in Asia ahead of the month and cautious forecasts for the Chinese economy.
UNN reports with reference to Reuters.
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July Brent crude futures fell 19 cents to $65.35 a barrel by 06:25 GMT. June West Texas Intermediate U.S. crude futures, which expire on Tuesday, rose 3 cents to $62.72, while the more active July contract fell 17 cents to $61.97 a barrel.
According to Deputy Foreign Minister Majid Takhtravanchi, discussions on Iran's nuclear program "will lead to nothing" if Washington insists that Tehran completely curtail uranium enrichment activities.
These statements came after U.S. Special Envoy Steve Witkoff reiterated on Sunday that Washington would require any new deal to include a non-enrichment pact, a prerequisite for developing nuclear bombs.
The agreement would pave the way for the easing of U.S. sanctions and allow Iran to increase oil exports by 300,000 to 400,000 barrels per day, said StoneX analyst Alex Hodes. Prices were also supported by expectations of stable physical demand in the near term amid high refining margins in Asia.
The Asian buying cycle started very mildly, but high margins and the completion of maintenance should still contribute to development
According to LSEG data, the average margin of complex oil refining in Singapore, which is a regional indicator, fluctuated at over $6 per barrel in May, which is higher than the average in April - $4.4 per barrel.
Markets viewed peace talks between Russia and Ukraine as a direction for Russian oil flows, which could increase supply and affect prices.
Energy markets are focused on potential peace talks, and a final agreement could lead to the easing of sanctions against Russia
The downgrade of the U.S. sovereign rating by Moody's also worsened the economic outlook for the world's largest energy consumer, which caused oil prices to rise.
On Friday, the rating agency lowered the U.S. sovereign credit rating by one notch, citing concerns about the country's growing debt of $36 trillion.
Data showing a slowdown in industrial production and retail sales in China, the world's largest oil importer, put more pressure on oil prices, as analysts expect a slowdown in fuel demand.
In a note to clients, BMI analysts forecast a 0.3% decline in consumption in 2025 compared to the same period last year, which will be affected by a slowdown in growth in all categories of petroleum products.
Even if China takes stimulus measures, it may take time to positively affect oil demand
Let us remind you
European Commissioner for Economy Valdis Dombrovskis said that the EU will propose to the G7 countries to reduce the ceiling price for Russian oil to $50 per barrel. The G7 price cap was agreed in December 2022.
Earlier, UNN reported that prices for Russian oil are falling for weeks, bringing the cost of exports closer to a two-year low.