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Oil falls 2% on possible return of Iranian supply

Coronavirus May 20, 2021 03:10PM ET
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© Reuters. FILE PHOTO: A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, India, May 21, 2018. REUTERS/Francis Mascarenhas

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices fell more than 2% on Thursday, marking a third day of losses, after diplomats said progress was made toward a deal to lift U.S. sanctions on Iran, which could boost crude supply.

Brent crude fell $1.55, or 2.3%, to settle at $65.11 a barrel. West Texas Intermediate crude ended $1.31, or 2.1%, lower at $62.05 a barrel. Both contracts fell around 3% in the previous session.

Iranian President Hassan Rouhani said in a televised speech that sanctions on oil, shipping, petrochemicals, insurance and the central bank had been dealt with in the talks.

"That really weighed on sentiment and that pushed us down a little bit," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "There’s room in the global market for more Iranian oil but in the short term that’s what is weighing on us today."

But European diplomats said success was not guaranteed and very difficult issues remained, while a senior Iranian official contradicted the president.

Indian refiners and at least one European refiner are re-evaluating their crude purchases to make room for Iranian oil in the second half of this year, anticipating that U.S. sanctions will be lifted, company officials and trading sources said.

"With global oil demand growth projected to be healthy for the balance of this year and in 2022, the (OPEC+) producer group is in a relatively comfortable position to deal with increasing Iranian output without undermining the oil rebalancing," PVM analysts said.

Concerns about the demand outlook in Asia also dragged prices down. Almost two-thirds of people tested in India show exposure to the coronavirus.

Speculation that the U.S. Federal Reserve might at some point start to tighten policy weighed on the outlook for economic growth and has prompted some investors to reduce exposure to oil and other commodities.

The Organization of the Petroleum Exporting Countries said that a stark warning from International Energy Agency to stop new fossil fuel funding could lead to oil-price volatility if it is acted on.

The IEA on Tuesday said investors should not fund new oil, gas and coal supply projects if the world wants to reach net zero emissions by mid-century.

Oil falls 2% on possible return of Iranian supply
 

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Comments (8)
Yiannis Tsoutsoukis
Yiannis Tsoutsoukis May 20, 2021 1:00PM ET
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By the way oil has been going downwards for years, actually from 2012 onwards, a technical analysis can make this crystal clear. Oil is heading down to 45 dollars. For those who don't believe then draw a downtrend trendline from 2012 until today on a monthly basis and you will find out by yourselves. Soooo, this has nothing to do with Biden and for God's sake stop blaming him for everything without evidence
Tyler Lee
Tyler Lee May 20, 2021 8:16AM ET
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Obiden really tryna prove all the stereotypes about his presidency. This will be a landslide win in 2022 and 2024 for Republicans.
Gene Kret
Gene Kret May 20, 2021 8:07AM ET
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Iranian is a tiny percent.... more fake news. Stop reacting to it!
Hunt Richardson
Hunt Richardson May 20, 2021 1:49AM ET
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why on Earth would Biden want to bring Iran's oil back online when stockpiles are increasing in the us??
NYSE NASDAQ
NYSE NASDAQ May 20, 2021 1:49AM ET
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because of the deal they will stop doing nuclear stuff and US will lift its sanctions. simple
Tyler Lee
Tyler Lee May 20, 2021 1:49AM ET
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I hope that's sarcasm.
Wisdom Godswill
Wisdom Godswill May 20, 2021 1:49AM ET
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If they don't, the war in Israel continues
Harrison Mwas
Harrison Mwas May 20, 2021 1:40AM ET
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hi... new here
Gene Kret
Gene Kret May 20, 2021 1:01AM ET
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All these writers say this and that when all youneed yo do is see how the demand within the next week will sky rocket.... hiw you ask?? No school, vacations, more airplanes will be flying, cruise ships, shortages of lumber, more trucking. Get it now ? Duh, oil will go up and up and up. Oh i forgot the second rise in oil will come when India opens back up in about 6 weeks ooooohhh that will be the middle of the Summer... add another $3-4!
haruna Ali
haruna Ali May 20, 2021 12:09AM ET
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people get confused and speechless
Ahmed Hsen
Ahmed Hsen May 19, 2021 11:23PM ET
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