[ad_1]
By Yuka Obayashi
TOKYO (Reuters) – Oil edged down on Wednesday amid fears that a possible return of Iranian supply could lead to a glut exceeding expectations of improving fuel demand in the United States, which were bolstered by a drop weekly inventory estimates.
Brent crude oil futures for July fell 6 cents, or 0.1%, to $ 68.59 a barrel at 4:34 a.m. GMT, while U.S. West Texas Intermediate (WTI) crude for July was of $ 65.92 per barrel, down 15 cents, or 0.2%.
Both benchmarks edged up on Tuesday, ending at their highest levels in a week, in hopes of higher demand fueled by the approach of summer driving season in the northern hemisphere and a lift coronavirus borders.
U.S. inventories of crude oil and fuel fell last week, two market sources said, citing figures from the American Petroleum Institute on Tuesday.
Crude inventories fell 439,000 barrels during the week ended May 21. Gasoline inventories fell 2 million barrels and distillate inventories fell 5.1 million barrels, the data showed, the sources said.
“The API data was good, but investors were paying more attention to the Iran talks, as the impact of a possible return of Iranian oil to the market is more significant,†Kazuhiko Saito said, chief analyst of commodity broker Fujitomi Co.
Iranian government spokesman Ali Rabiei said on Tuesday he was optimistic that Tehran would soon reach a deal in negotiations with world powers to revive a 2015 nuclear deal, although Iran’s main negotiator warned that serious problems remained.
Iran and world powers have been negotiating in Vienna since April to determine what steps Tehran and Washington need to take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact with world powers.
The latest round of talks resumed in Vienna this week after Tehran and the UN nuclear agency extended a pact to monitor the Middle Eastern country’s atomic program.
“Without clarity on the fate of the Iranian nuclear negotiations, it is difficult for investors to move up or down,” said Hiroyuki Kikukawa, chief research officer at Nissan Securities.
“But oil prices are expected to hold near current high levels as expectations of fuel demand pick up in the United States and Europe, especially towards the end of the year with a pickup in demand for jet fuel. , will offset concerns about the return of the Iranian offer, “he said.
Analysts said Iran could deliver around 1 to 2 million barrels per day (b / d) of additional oil if a deal is reached and sanctions lifted.
Goldman Sachs said it expected oil prices to climb to $ 80 a barrel in the fourth quarter, arguing that the market underestimated a rebound in demand even with a possible recovery in Iranian supply.
(Reporting by Yuka Obayashi; Editing by Clarence Fernandez)
[ad_2]