Oil futures: Prices slump as progress seen on Iran talks, Brent below $91/b
Quantum Commodity Intelligence – Crude oil futures in European trading hours Friday were slumping lower on the increased likelihood of an Iranian nuclear deal that would lead to more crude on the market, potentially within a few weeks, but continued tensions between Russia and the West helped to moderate losses.
Front-month April ICE Brent futures were trading at $90.75/barrel (1026 GMT), compared to Thursday’s settle of $92.97/b.
At the same time, March NYMEX WTI was trading $89.51/b, versus Thursday’s settle of $91.76/b, while the more-liquid April contract was trading at $87.93/b, versus 90.04/b on the previous close.
Both markets were heading for the first weekly loss of the year with prices down by nearly 4% from Feb. 11, while Brent was down by 6% since Monday’s 8-year high of $96.78/b.
The United States said Thursday that “substantial progress” had been made during negotiations in Vienna, deeming an agreement possible within days if Iran “shows seriousness” on the matter.
“Positive developments in the US-Iran nuclear negotiations are helping to calm oil prices as hopes of Iranian barrels returning to the global picture build. Although not a done deal yet, prices are sliding on news of progress and broad consensus in the talks as it could ultimately see up to 900,000 bpd of crude added to the market by December this year,” said Rystad Energy’s Senior Vice President, Claudio Galimberti.
However, after repeated false alarms, sections of the market continue to cast doubt on the deal getting through.
“It is unlikely that a new treaty will be signed in the coming weeks, as the two sides acknowledge that they need to make more progress in the negotiations,” said risk analysts Eurasia.
Meanwhile, US President Joe Biden has said he believes Russia is on the brink of invading Ukraine, as he joined Nato allies in warning that shelling in the disputed east of the country may be an attempt to set up the pretext for an incursion.
Claims and counterclaims of attacks by Russian-backed separatists at several locations in Ukraine’s Donbas region continued, while Biden said his administration had “reason to believe” that Russia was “engaged in a false-flag operation to have an excuse to go in”.
German Foreign Minister Annalena Baerbock said Moscow needed to show “serious steps towards de-escalation” Friday, ahead of the Munich Security Conference.
Published: 18-02-2022
