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Oil prices dip on concerns about possible return of Iranian supply By Reuters

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© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above on the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

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By Bozorgmehr Sharafedin

LONDON (Reuters) -Oil prices fell on Thursday however stayed inside the tight vary set this week, with optimism about the summer season driving season within the United States and Europe offsetting concern about demand in India and a possible enhance in Iranian provides.

fell 57 cents, or 0.8%, to $68.30 a barrel by 0934 GMT, and U.S. West Texas Intermediate (WTI) crude fell 55 cents, or 0.8%, to $65.66 a barrel.

“Despite supportive inventory data from the United States on Wednesday, crude oil remains stuck in a sideways environment with Brent trading between $65 to $70 per barrel,” mentioned UBS oil analyst Giovanni Staunovo.

shares, gasoline and distillate inventories fell final week, the Energy Information Administration mentioned, as a gradual lifting of coronavirus-related restrictions boosted highway gasoline demand. [EIA/S]

“Mobility data out of Europe and the U.S. benefiting from a fast vaccine rollout are price supportive, but I guess market participants want to get more clarity how nuclear talks in Vienna evolve, which caps prices,” Staunovo added.

Iran and international powers have negotiated in Vienna since April to work out steps that Tehran and Washington should take so the crippling sanctions on Iran, together with on its vitality sector, over its nuclear programme, are lifted.

That might be a giant challenge for the subsequent assembly of the Organization of the Petroleum Exporting Countries and allies, collectively referred to as OPEC+, on June 1, the place producers must assess whether or not to vary their plans for alleviating manufacturing curbs in opposition to the prospect of Iranian supply returning to the market.

Analysts mentioned any enhance of supply from Iran would solely be gradual, with JPMorgan (NYSE:) estimating Iran might add 500,000 barrels per day (bpd) by the tip of this yr and an extra 500,000 bpd by August 2022.

Japanese refiners will want a minimum of three months to renew Iranian oil imports even when the Iranian nuclear talks result in an settlement and a lifting of sanctions, Tsutomu Sugimori, president of the Petroleum Association of Japan (PAJ) mentioned.

While the market was supported by a bigger-than-expected drawdown in U.S. oil inventories, there are nonetheless concerns about demand shrinking in India, the world’s third-largest oil shopper.

A possible extension of COVID-19 emergency measures in Japan has additionally fuelled concern about demand development on the earth’s fourth-biggest importer of oil.

Investors are awaiting U.S. jobless claims knowledge, due later within the day, which is able to present the tempo of U.S. financial restoration in the course of the pandemic.

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