Oil steady propped by demand optimism despite Iranian supply worries

26.05.2021 - Evdokimov Roman
Oil steady propped by demand optimism despite Iranian supply worries

On Wednesday, Oil prices had remained steady as it traded in a narrow range that is propped by optimism that the U.S. fuel demand and weak dollar would improved. Only, this comes with the prospect of a return of Iranian oil to markets that effectively puts pressure on prices.

At 0839 GMT, Brent climbed 0.2% higher, settling at $68.79 per barrel. Meanwhile, the U.S. West Texas Intermediate (WTI) crude went up 1 cent ending with a price of $66.08 per barrel. Regarding the matter, ING Analyst Warren Patterson in an interview was quoted saying:

“Physical demand has been improving in both Europe and the United States as a slowdown in new Covid cases has been pushing up mobility,”

With summer in the cards for the northern hemisphere and COVID-19 restrctions eased, demand have been pushed up. This resulted into the U.S. Crude Oil and Fuel inventories to fall in the past week according to certain sources that had looked to figures from the American Petroleum Institute.

In the week ended May 21st, Crude Stocks had fallen by 439,000 barrels. Meanwhile, Gasoline inventories all fell by 2 Million barrels alongside distillate stocks that plummeted to 5.1 million barrels.

The dollar had grown weak near multi-month lows after a dovish monteary policy stance had been reaffirmed by Federal Reserve officials, thus reassuring inevstors who are wary of the rising inflation.

The Iran-U.S. nuclear talks are also being intently monitored by Market Players as this could highly likely lift sanctions on the Iranian Energy Sector and could espouse the return of Iranian barrels to the market.

Ali Rabiei, Spokesperson for the Iranian government expressed optimism over te Tehran agreement whilst a top negotiator warned against the serious issues that persisted.

Global powers and Iran have been in talks in Vienna since April to compel Tehran and Washington to take on sanctions and nuclear activities to resume compliance with the 2015 nuclear pact with world powers.

Iran could possibly provide about 1 to 2 million barrels per day, a considerable additional oil supply, should a deal be reached and the sanctions consequently lifted.

Commerzbank Analyst, Eugen Weinberg had this to say:

“In our view, the fundamental situation on the oil market remains balanced…Thanks to the good sentiment on the financial markets, the price momentum suggests that Brent will make a renewed bid for the $70 per barrel mark in the next few days.”


Risk disclaimer "PROMETHEUS LTD – Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0155 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of PROMETHEUS LTD and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from umarkets.ai or PROMETHEUS LTD." Cookies notification: We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Read more. Continue

Help with deposit?