Brent Slides to $71.40 amidst Delay in Iran Nuclear Deal Talk
Brent Crude price slides to $71.40 per barrel Monday due to delay in Iran nuclear deal discussion. However, general feel for strong demand outlook persists due to moderating covid-19 caseloads in India and positive outlook from United States stock draw record.
But, the market is rightly aware that extra bucket of Iranian crude oil into the market would affect prices. However, the Organisation of Petroleum Exporting Countries and allies (OPEC+) expect improvement in demand outlook as OPEC Secretary General Mohammad Barkindo, said the group expects inventories to fall further in coming months.
Barkindo revealed this while making a virtual appearenace at the ongoing Nigeria International Petroleum Summit.
Meanwhile, after hitting fresh multi-year highs, oil prices sloped downward as investors awaited the outcome of this week’s talks between Iran and world powers over nuclear deal that is expected to boost crude supplies.
Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports.
The price of OPEC basket of thirteen crudes stood at $70.21 a barrel, compared with $69.89 the previous day, according to OPEC Secretariat calculations
Earlier today, Brent peaked at $72.27 per barrel, consolidating last week gain after breaking the $70 resistance level, though Goldman Sachs expected oil to trade at $80 in 2021.
Delay in Iran and United States discussion helped oil price stability in the recent time despite move by the Organisation of Petroleum Exporting Countries (OPEC+) to incrementally raised output level.
Market participants are trying to strike a balance between rising demand from the world’s largest economies and potentially higher output from Iran as well as new Covid-19 outbreaks in the Asia-Pacific region.
Across the Pacific, China’s Guangdong province is facing a new wave of Covid-19 infections. Local authorities hinted they have tightened controls to curb the spread of the virus, encouraging residents to limit travel.
This may cast a shadow over the outlook for energy demand in the world’s second-largest economy. Guangdong is China’s most prominent manufacturing and technology hub, contributing to around 12% of the country’s gross domestic products.
Some analysts however told MarketForces Africa that concerns about a surge in Iranian oil supplies have faded, thus helping Brent crude to break above $70 per barrel.
Data shows that oil prices dipped on Monday, pulling back from two-year highs reached on expectations of improved demand and OPEC producers keeping supply curbs in place.
Brent crude hit $72.27, the highest since May 2019, but lost 0.7% to $71.40 while U.S. West Texas Intermediate touched $70 for the first time since October 2018, also shed 0.7% to $69.14.
Crude has risen for the past two weeks, and Brent is up by more than 35% this year in 2021. Global demand has risen as the United States and Europe have loosened COVID-19 restrictions, while India has begun to ease its latest lockdown.
On Monday, at Nigeria International Petroleum Summit, OPEC Secretary General Mohammad Barkindo said the group expects inventories to fall further in coming months.
Oil stocks in developed world nations fell by 6.9 million barrels in April, Mohammad Barkindo said in a virtual presentation.
OPEC+ complied with 114% of agreed output curbs in April, Barkindo said. He said during panel discussion at the conference that while OPEC did not deny climate change, the global economy still needs oil.
Brent Slides to $71.40 amidst Delay in Iran Nuclear Deal Talk
