Oil prices fell on Thursday as concerns over demand in India and the potential for increased supplies from Iran offset optimism about the summer driving season in the United States and Europe.
Brent fell 60 cents, or 0.9%, to $ 68.27 a barrel at 11:21 a.m. GMT. U.S. West Texas Intermediate (WTI) crude fell 57 cents, or 0.9%, to $ 65.64 a barrel.
“Despite favorable inventory data from the United States on Wednesday, crude oil remains stuck in a sideways environment with Brent trading between $ 65 and $ 70 a barrel,” said Giovanni Staunovo, oil analyst at UBS.
Inventories of U.S. crude, gasoline and distillates fell last week, the Energy Information Administration said, as a gradual lifting of coronavirus restrictions boosted demand for road fuel.
“Data on mobility outside of Europe and the US with rapid vaccine roll-out is price-friendly, but I guess market players want more clarity on how nuclear negotiations are going. in Vienna, which caps prices, ”Staunovo added.
Iran and world powers have been negotiating in Vienna since April to outline the steps Tehran and Washington should take to secure the lifting of sanctions against Iran, including its energy sector, in return for Iran complying with restrictions. on its nuclear activities.
These talks will be a major issue for a June 1 meeting of the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC +. Producers will need to assess whether to modify production flexibility plans in view of the prospect of Iranian supply returning to the market.
Analysts said any increase in Iran’s supply would only be gradual, with JP Morgan estimating Iran could add 500,000 barrels per day (b / d) by the end of this year and 500,000 b / d. j by August 2022.
Japanese refiners need at least three months to resume Iranian oil imports, even if nuclear negotiations lead to a deal and a lifting of sanctions, said Tsutomu Sugimori, chairman of the Japan Petroleum Association (PAJ ).
Despite support for oil from a larger-than-expected drop in oil inventories in the United States, concerns persist about declining demand in India, the world’s third-largest oil consumer.
A possible extension of emergency measures against COVID-19 in Japan has also raised demand concerns. Read more
Investors are awaiting US jobless claims data, due later Thursday, which will show the pace of the US economic recovery.
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