Oil soars as growing demand cope with supply concerns in Iran
Oil prices edged up on Tuesday as growing demand as the northern hemisphere’s summer driving season approaches and the lifting of coronavirus restrictions raised concerns that Iran’s possible return to the market. does not cause a glut of supply.
After gaining more than 5% in the previous two sessions, Brent futures rose 19 cents, or 0.3%, to $ 68.65 a barrel, while U.S. crude West Texas Intermediate (WTI) rose 2 cents to $ 66.07.
It was the highest close for both benchmarks in one week.
Another factor supporting crude prices was the decline of the US dollar (.DXY) to a 19-week low against a basket of currencies as inflation concerns dissipated. A weaker dollar makes it cheaper for holders of other currencies to buy commodities at dollar prices, such as oil. Read more
The weak oil price movements came as the market waited for the direction of the weekly U.S. Oil Inventory Reports which are expected to show U.S. crude inventories fell 1.1 million barrels last week. The American Petroleum Institute’s trade data is due at 4:30 p.m. EDT (2030 GMT), followed by the government report on Wednesday morning. ,
“Oil prices … remain at high levels as the peak oil demand season approaches and restrictions are lifted across much of Europe and the United States,” said Louise Dickson, oil markets analyst at Rystad Energy.
Parts of Europe and the United States are seeing fewer infections and deaths from COVID-19, prompting governments to ease restrictions. However, in regions like India – the world’s third largest importer of oil – infection rates remain high. Read more
Indirect negotiations between the United States and Iran are expected to resume this week in Vienna. Talks resumed after Tehran and the UN nuclear agency extended an agreement to monitor the Middle East country’s atomic program. Read more
Analysts said Iran could deliver around 1 to 2 million barrels per day (b / d) of additional oil if a deal is reached and sanctions lifted. Read more
“Crude prices are on a wait-and-see basis until the fifth round of negotiations to revive the Iran nuclear deal is completed,” said Edward Moya, senior market analyst at OANDA, noting that “energy traders must find out how much Iranian crude is going. to hit the market. “
Any increase in Iran’s supply would come on top of the additional barrels already expected from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, a group known as OPEC +, which plans to bring back around 2 million bpd of production through July. Read more
“Additional barrels hitting international markets have served as headwinds for Brent, with the US Oil Fund announcing inflows of $ 104 million on Monday, the largest since August, serving as a tailwind for WTI “said Bob Yawger. , director of energy futures at Mizuho in New York.
Brent month’s premium on the same WTI contract fell to its lowest since November 2020 on Monday and held near that level on Tuesday, while the month’s premium before WTI versus month two of WTI reached its highest since February.
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