Oil Falls as Market Keeps Tab on US-Iran Nuclear Deal
Crude oil prices slide lower early Tuesday, after recovering slightly at the start of the week, as recession fears force a substantial correction and nuclear deal talks conclude in Vienna, OANDA analyst Craig Erlam said in a Tuesday note.
Amidst global economic pressures, Brent crude fell 1.2% to $95.48 per barrel and West Texas Intermediate lost 1.4% to $89.46/b at last look early Tuesday.
It remains to be seen how sustainable $90 per barrel of oil is given prevailing tight market conditions and the Organization of the Petroleum Exporting Countries’ reluctance to make bigger moves to address it, Erlam noted.
The European Union suggested that a final text will be put forward for the US and Iran to either agree on or reject. However, traders may not be hopeful given the extended timeline of the talks and points of contention reportedly remaining, according to Erlam.
An agreement could ease pressure on oil prices, but the extent would depend on how quickly Iranian crude can return to the market, the analyst added. Demand concerns have weighed on sentiment over the past month as central banks raise rates to counter rising inflation, according to market analysts.
However, recent data showed improvement in Chinese demand, with oil imports climbing 4.2% in July, recovering from a four-year low in June. Still, imports remained low on a seasonal basis due to ongoing COVID-19 restrictions.
The market is also watching out for a potential US-Iran nuclear deal as European Union diplomats finish a final draft accord to be presented to both parties, ANZ Bank said.
# Oil Falls as Market Keeps Tab on US-Iran Nuclear Deal#