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Crude Oil Largely Flat; Iran Nuclear Talks in Spotlight

Commodities Aug 16, 2022 09:02AM ET
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By Peter Nurse 

Investing.com -- Oil prices stabilized Tuesday after the previous session’s sharp losses while traders monitored talks on a reviving deal that could allow more Iranian oil exports.

By 09:05 ET (13:05 GMT), U.S. crude futures traded 0.3% lower at $89.14 a barrel, while the Brent contract fell 0.4% to $94.67. Both benchmarks fell around 3% in the previous session.

U.S. Gasoline RBOB Futures were flat at $2.9520 a gallon.

The crude oil market continues to trade near its 2022 lows on concerns of a global recession, especially following disappointing economic data from China, the biggest crude importer in the world.

A lot of the focus Tuesday has been on the talks between the European Union and Iran over the revival of the 2015 nuclear deal, which could result in the return of Iranian oil to the world market.

The EU sent what it described as a "final" offer to Iran earlier this month, after 16 months of fitful talks, and said it had seen ‘nothing alarming’ in Iran’s response to the plan, received late on Monday.

"For the moment, we are studying it and we are consulting with the other JCPOA participants and the U.S. on the way forward," an EU spokesperson said Tuesday, referring to the nuclear deal by the official abbreviation JCPOA.

Approval by the EU raises the chance of the Biden administration also accepting it – subject to the usual caveats of U.S. politics.

“A revival of the deal and lifting of oil sanctions could potentially see Iran increasing oil supply in the region of 1.3MMbbls/d over time,” said analysts at ING, in a note, “which would help to ease some of the expected tightness in the oil market over 2H23.”

Aside from the Iranian decision, market participants also await industry data on U.S. crude stockpiles, due later Tuesday, with oil and gasoline stockpiles expected to have fallen last week.

“While the short term outlook appears more negative, the longer term outlook is still somewhat constructive,” ING added. “U.S. drilling activity is increasing, although the pace has been slower than we have seen in previous upcycles.”

Crude Oil Largely Flat; Iran Nuclear Talks in Spotlight
 

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Comments (1)
Bull Power
Bull Power Aug 16, 2022 9:35AM ET
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Yes, let Iran have nuclear weapons, totally worked great with North Korea which cannot be attacked, works amazing with Russia which cannot be attacked and actually has the firepower to attack others, really just what are we waiting for? We need as many dictatorships as possible to have nuclear weapons, no downside! Alternative solution: ****it all up while there's the option to do so.
Barani Krishnan
Barani Krishnan Aug 16, 2022 9:35AM ET
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I hear you but I don't think there's anything the world can do -- short of annihilating Iran -- to prevent the Mullahs from getting their first atomic bomb (if they haven't a prototype already). Once a nation sets on the path of nuclear proliferation, it's just a matter of time before it reaches fulfillment of that agenda. The US tried its best from the mid 1990s to stop North Korea but the Kims still acquired the nuclear arsenal they wanted. I'm not saying "let's help Iran's goal" here by doing this deal. But frankly, having European IAEA inspectors on the ground doing regular surveillance is better than isolating Iran and giving it all the freedom to do what it wants unhindered.
Bull Power
Bull Power Aug 16, 2022 9:35AM ET
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Barani Krishnan  In 1981 Iraq was building (with the help of France because irresponsible Europe is irresponsible) a nuclear power plant, Saddam Hussein back then much less dead and much more of an active threat to everyone around him wanted to use this in order to make nuclear bombs which if he managed would have prevented the US invasion of desert storm, it wasn't any European country or even the US that bothered stopping that, it was Israel who precieved this as an immidiate threat, they stopped it by simply destroying the reactor, setting the Iraqis so far back they could simply never manage this again. Now as much as Israel is the obvious first target of Iran, Israel doesn't have the firepower to take out all of Iran's nuclear reactors as many of them are built underground and in mountains, the only country in the world to have the required firepower to end this before it starts is the USA and I don't know if they'll never try again but bombing every single reactor will delay Iran by 20 years+.
Bull Power
Bull Power Aug 16, 2022 9:35AM ET
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Barani Krishnan  Those inspectors found violation after violation and nothing was done about it, it's not a question of if but when Iran will decide to make a bomb, this isn't an acceptable route. It took North Korea 40 years to develop a bomb and it could have been easily stopped by destroying their reactors, in 1981 Iraq was trying to achieve this - it was Israel that stopped Saddam by simply destroying his reactor, it was never rebuilt. Iran's nuclear infrastracture is now so vast and so well protected only USA can execute a bombing attack that will destroy every single reactor, no one else has the bunker busting technology at such scales as well as the ability to simply get away with it, this might not stop it forever - but it will delay it for 20 years easily and a continued isolation along with that would force them to rethink this agenda.
Barani Krishnan
Barani Krishnan Aug 16, 2022 9:35AM ET
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Bull Power  Very valid argument, yours. But America after Iraq seems to be in conflict disengagement mode, intervening secondarily (like in Ukraine) rather than being directly in conflict. I know that a strike to destroy reactors would have the cover of war-prevention rather war-initiation and Iran would not be in a position to retaliate, both morally and capacity-wise. It appears though that the US is trying to balance the increasingly cosy Saudi-Russia relationship by giving Iran some muscle. It's, of course, a dangerous gambit and only time will tell whether that's right. But all things said, I believed right from the start that Iran would get the bomb someday and they seem closer to it than ever before. The question though is will they use it. I think every crackpot in the world -- and Kim is certainly one -- knows that to be the point of no return. It's not a comforting thought for sure, but so far history has been on the good side since Hiroshima and Nagasaki.
 
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