Oil fell by more than a dollar amid expectations of a nuclear deal between the US and Iran
Kyiv • UNN
The price of Brent and WTI oil fell due to expectations of an agreement between the US and Iran regarding sanctions, as well as due to an unexpected increase in oil reserves in the United States.
Oil prices fell by more than $1 during trading on Thursday amid expectations of a potential nuclear deal between the US and Iran, while an unexpected increase in US oil inventories last week fueled investor fears of oversupply, UNN writes, citing Reuters.
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Brent crude futures fell $1.49, or 2.3%, to $64.60 a barrel by 04:05 GMT (07:05 Kyiv time). West Texas Intermediate (WTI) crude futures fell $1.46, or 2.3%, to $61.69.
Both brands lost about 0.8% in price on Wednesday.
Iran is ready to agree to a deal with the US in exchange for the lifting of economic sanctions, an Iranian official told NBC News in an interview published Wednesday.
"The new sales were triggered by expectations that a nuclear deal between the US and Iran would ease recently tightened US sanctions on Iran, which could weaken the global supply and demand balance for crude oil," said Yuki Takashima, an economist at Nomura Securities.
Saudi Arabia fully supports nuclear talks between the US and Iran and hopes for positive results, Foreign Minister Prince Faisal bin Farhan Al Saud said on Wednesday.
Washington imposed sanctions on Wednesday to halt Iran's efforts to produce components for ballistic missiles domestically, the US Treasury Department said, following sanctions on Tuesday against about 20 companies in a network that it said had long supplied Iranian oil to China.
The sanctions were imposed after a fourth round of talks between the US and Iran in Oman aimed at resolving the dispute over Iran's nuclear program.
An unexpected increase in US inventories overnight is also putting pressure on prices, as is profit-taking after oil jumped to the upper end of its recent $55-65 a barrel range, said IG analyst Tony সিকামোর.
"My forecast is this: we will continue to see a range-bound market over the next month or so, however, unless there is an unexpected geopolitical shock, when the range really changes, it will be downward, to $50 a barrel," he said.
Data from the US Energy Information Administration showed that oil inventories rose by 3.5 million barrels to 441.8 million barrels in the week ending May 9, compared with analysts' expectations in a Reuters poll that inventories would decline by 1.1 million barrels.
API data for the industry also showed a significant increase in oil inventories of 4.3 million barrels last week, market sources said on Tuesday.
The Organization of the Petroleum Exporting Countries and its affiliated producers, known as OPEC+, is increasing supplies, although OPEC on Wednesday lowered its forecast for oil supply growth from the US and other producers outside the broader OPEC+ group this year.