Oil prices suffer weekly fall for first time in two months amid Iran-US talks
Oil prices are heading for a weekly fall for the first time in nearly two months, following further losses on both major benchmarks.
Continued progress in talks between the US and Iran has raised the possibility of a new deal between both nations in line with the 2015 nuclear agreement.
Such an agreement is likely to result in extra supplies from Iran flooding the market, and relieving pressure on supplies as OPEC+ continues to miss its raised output targets.
Diplomats have revealed the draft accord outlines a sequence of steps that would eventually lead to granting waivers on oil sanctions.
This would bring 1m more barrels a day of oil back to the market – with South Korea already expressing interest in new arrangements with Iran.
Brent Crude has dipped 2.17 per cent to $90.95 per barrel while WTI Crude has fallen a 2.3 per cent and receded below $90.
Both benchmark contracts hit their highest levels since September 2014 on Monday, but were headed for their first weekly fall in nine weeks amid reports of a deal taking shape to revive Iran’s 2015 nuclear agreement with world powers.
The timing of any new US-Iran deal is uncertain, and the potential for conflict in Ukraine could revive prices over the coming days – with analysts still speculating on the potential for prices to hit $100.
Craig Erlam, senior market analyst at OANDA, said: “Reports of the US and Iran nearing a new nuclear deal couldn’t have come at a better time and oil prices are slipping at the prospect of more than a million barrels of crude re-entering the market. In the absence of a deal, we could already be talking about triple-figure oil prices.”
Commerzbank analyst Carsten Fritsch added: “If it had not been for reports that agreement was supposedly imminent in the nuclear talks with Iran, oil prices would have probably already attempted to overcome the $100 per barrel mark. According to S&P Global Platts, this was in fact achieved briefly on the physical oil market.”