Crude Oil Futures Retreat On Iran Nuclear Outline
Crude oil futures declined after Iran and world powers said they reached an outline accord that keeps them on track to end a decade-long nuclear dispute.
Brent slid 3.8% in London, while West Texas Intermediate crude dropped 1.9% in New York. The sides now have until the end of June to bridge gaps and draft a detailed technical agreement that would ease the international sanctions imposed on Iran, including oil exports. Prices pared losses on speculation no additional Iranian oil will flow into the global market in the short term.
“This is mildly bearish,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. “We were expecting more Iranian oil to hit the market regardless of the outcome of the talks. They are not about to dump oil on the market.”
Iran, a member of OPEC, could boost shipments by 1 million barrels a day if penalties are lifted, Oil Minister Bijan Namdar Zanganeh said March 16. Extra supplies would add to a worldwide glut that’s sent oil prices 50% lower since last year.
WTI for May delivery settled down 95 cents to end at $ 49.14 a barrel on the New York Mercantile Exchange. The contract climbed $ 2.49 to $ 50.09 on Wednesday, the biggest gain since February.
Brent for May settlement declined $ 2.15 to $ 54.95 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $ 5.81 to WTI on the ICE.