Oil falls on possibility of Iranian deal and weak prospects for demand – Oil

Oil falls on possibility of Iranian deal and weak demand prospects

US gasoline inventories rose more than expected, raising concerns about demand.

“Black gold” prices continue to lose ground in the main international markets, pressured by weak demand and the report that the United States and Iran may be close to an agreement on oil exports – which overshadowed the expectation of a tighter offer from Saudi Arabia and of a potential pause in the hike in interest rates by the US Federal Reserve.

The West Texas Intermediate (WTI), “benchmark” for the United States, yielded 0.12% to 72.44 dollars per barrel.

For its part, North Sea Brent, crude traded in London and a reference for European imports, slipped 0.13% to 76.85 dollars/barrel.

Iran and the US appear to be close to a temporary deal, two sources close to the talks told the Middle East Eye. Under that agreement, Washington will ease some of the sanctions imposed on Tehran in exchange for the Iranians reducing their activities around uranium enrichment by 60% and continuing cooperation with the International Atomic Energy Agency (IAEA) to monitor and verify the its nuclear program.

It should be recalled that Iran is not participating in the effort to cut production by the cartel to which it belongs, the Organization of Petroleum Exporting Countries, due to the international sanctions it is targeting until it revitalizes the nuclear agreement. With an understanding with the US, more Iranian crude will enter the market.

On the other hand, US gasoline stocks increased more than expected, which raised concerns about demand.

As for the Fed, most observers still point to yet another hike in interest rates at the June 13-14 meeting, by 25 basis points, but economists polled by Reuters estimate that at next week’s monetary policy meeting the central bank of the US will decide to pause the cycle of federal funds rate hikes.

2023-06-08 16:32:00

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