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Copper Tip Energy

Oil Extends Loss With Investors Assessing Iran Supply Prospects

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These translations are done via Google Translate
(Bloomberg) Oil’s decline accelerated as investors assessed prospects for more crude supply flowing from Iran.West Texas Intermediate futures slumped as much as 1.2% as a stronger dollar reduced the appeal of commodities priced in the currency. World powers are conducting talks to revive a nuclear agreement with Iran that could pave the way for a lifting of sanctions. Traders are weighing the likelihood of a deal against signs of buoyant demand in some parts of the world. Meanwhile, an industry stockpile report in the U.S. showed a decline in crude and fuel inventories ahead of government data that will be released later on Wednesday.

“There’s a slug of Iranian oil hanging over the market,” said John Kilduff, a partner at Again Capital LLC. “To the extent they get sanctions lifted and countries can buy from them without fear of reprisal,” it puts downward pressure on prices.

Yet prices have been supported in recent days by indications of healthy demand in the U.S., China and Europe, despite parts of Asia facing a comeback of Covid-19. A key gauge in the American physical market is signaling that traders are bracing for a potential supply crunch ahead of the busy summer driving season.

  • West Texas Intermediate for July delivery slipped 62 cents to $65.45 a barrel at 9:05 a.m. in New York
  • Brent for July settlement fell 46 cents to $68.19

“The fact is that price levels still remain well within reach of the $70 mark,” said Louise Dickson, oil markets analyst at Rystad Energy. “Global optimism over the coming strong summer demand is overwhelming.”


The American Petroleum Institute reported on Tuesday that U.S. gasoline stockpiles fell by almost 2 million barrels last week, while crude inventories slid by 439,000 barrels, according to people familiar with the data.

Other market news:
  • U.K. road use last week matched its highest level since the pandemic began, government data showed.
  • The Shanghai Futures Exchange pledged to curb unreasonable moves on its commodities contracts as the authorities in China step up efforts to temper prices.
  • Oil may be capped at about $65 a barrel with Iran likely to boost output after an expected nuclear deal and OPEC+ continuing to ease production cuts, Rapidan Energy Group President Bob McNally said on Bloomberg television.

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