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Oil prices edge up as Iran export surge to take time after deal

An oil well is seen near Denver, Colorado February 2, 2015. Oil prices rose on Wednesday as investors recognised it would take time for Iran to ramp up oil exports after its nuclear deal with six world powers, although an ongoing global crude glut kept a lid on gains. Under the nuclear deal reached on Tuesday, sanctions imposed by the United States, the European Union and the United Nations are to be lifted in exchange for curbs on Iran’s nuclear programme. While oil prices initially fell on the news, they recovered later as it became apparent the deal would not immediately lead to a flood of new supply. Brent crude was up 27 cents at $58.78 a barrel by 0529 GMT. U.S. futures were up 18 cents at $53.22. "New oil will not flow from Iran until 2016 and there will probably be less of it than optimists predict," […]

Posted On : Published By : Tom Whipple
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Crude futures bounce off lows to settle higher on Iranian deal

Crude futures closed higher Tuesday, recovering from early declines, as the market recognized the just-announced Iranian nuclear deal will unlikely lead to a large jump in Iranian crude exports this year. NYMEX August crude led the oil complex, settling 84 cents higher at $53.04/barrel. ICE August Brent settled up 66 cents at $58.51/b. Refined product futures were almost unchanged. NYMEX August ULSD closed 66 points higher at $1.7253/gal, while NYMEX August RBOB settled down 89 points at $1.9307/gal. The historic agreement places strict limits on Iran’s nuclear program in exchange for a lifting of EU and US economic sanctions. Article continues below… Oilgram Price Report is a daily report that covers market changes, market fundamentals and factors driving prices. Oilgram Price Report also brings a vast array of Platts international prices for crude and products, netback tables, and market critical data. But sanctions will not be removed until compliance […]

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U.S., Brent curves align as oil traders caution slump may be ahead

The word oil is pictured on an oil bank at a recycling yard in London March 2, 2011. The structure of the oil market is shifting with the one-year price curves for global Brent and U.S. crude converging, a signal that traders say may portend the next leg down in the price rout. U.S. oil firmed over the past two months and global Brent weakened, but the two are now changing course. The reversal undermines conventional wisdom that the U.S. market is rebalancing on a pickup in demand and Brent is backlogged with barrels in floating storage. While punters watch oil prices bounce up and down, real oil traders tend to monitor so-called "term structure" or the differences in contract prices for future delivery. That structure is a key indicator of the market’s health. "WTI is playing some catch-up to Brent structure that’s been weaker for some while, reflecting […]

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Oil futures curve shows caution over Iran’s return

U.S. Secretary of State John Kerry (2nd L) meets with foreign ministers and delegations from Germany, France, China, Britain, Russia and the European Union at a hotel in Vienna, Austria July 13, 2015. Have oil markets done enough, or too much, to price in the expected return of millions of barrels of Iranian crude? Global benchmark Brent crude gained 1.1 percent on Tuesday after news of the deal between Iran and six major powers to monitor the Islamic republic’s nuclear program in exchange for a relaxation of sanctions, including those on oil exports and investment. The rise in Brent was ascribed to the view that even if the deal gets final approval from all parties, it will still take several months to start being implemented, meaning that increased Iranian oil shipments are unlikely to hit the market until sometime in 2016. While movements in the front-month futures contract tend […]

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Never mind Iran. Oil price is going nowhere

Crude oil came under renewed pressure Tuesday as Iran and six world powers announced they had reached a deal on Tehran’s nuclear program. But Citigroup’s head of commodities research played down the impact of Iran’s potential return to the oil market, saying traders shouldn’t expect much net price movement in crude futures. “In six months we think we’ll be at exactly the same level we’re at now. It’ll maybe go up a bit in the third quarter,” Edward Morse told CNBC’s “Squawk Box.” U.S. benchmark West Texas Intermediate crude was trading at about $53 Tuesday, while international Brent priced near $58.50. “How far down could it go? We’ll repeat what we’ve said before. If nothing gives, production will have to be shut in through the price mechanism, and it will take $40 or lower WTI to get to that level,” Morse said. The nuclear agreement reached this week would […]

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Congressional Republicans Signal Deep Resistance to Iran Nuclear Deal

WASHINGTON—The nuclear deal between Iran and six global powers is set to spark a fierce foreign policy fight on Capitol Hill, pitting Republicans and potentially some Democrats against President Barack Obama in his push to implement what would be a cornerstone of his international legacy. Implementation of the accord depends on whether Mr. Obama can retain the support of enough of his party’s lawmakers in the face of what is almost certain to be widespread GOP opposition . Congress is expected to review the agreement and vote on it in early September, and the initial Republican reaction signaled deep resistance to the deal. The prospect that the GOP-controlled Congress will try to block the deal puts Mr. Obama in the familiar position of trying to minimize defections from his own party and leaves Democrats considering whether they can back an agreement vilified across the aisle. “The deal that we […]

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OPEC Members Disagree Over Prospect of New Oil Supplies From Iran

The nuclear agreement between Iran and six world powers has caused disagreement among Organization of the Petroleum Exporting Countries officials over how to react to new supplies of oil coming onto the export market. As oil prices dropped Tuesday after the deal was announced, Algeria’s oil minister Salah Khabri said he may call for an emergency OPEC meeting to address the situation. In addition to the Iran development, the oil market has been affected by the Greek debt crisis and the Chinese stock market’s recent dive . “Considering the current situation in the oil market, especially a drop in oil prices, we will, if needed, summon an extraordinary OPEC meeting,” said Mr. Khabri, according to the state-run news service APS. Iraq’s oil ministry said Tuesday that it would increase the country’s oil exports in reaction to the deal to make up for the anticipated drop in prices. Iraq has […]

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Iran Nuclear Deal ‘Built on Verification,’ Obama Says

VIENNA — Iran and a group of six nations led by the United States said they had reached a historic accord on Tuesday to significantly limit Tehran’s nuclear ability for more than a decade in return for lifting international oil and financial sanctions. The deal culminates 20 months of negotiations on an agreement that President Obama had long sought as the biggest diplomatic achievement of his presidency. Whether it portends a new relationship between the United States and Iran — after decades of coups, hostage-taking, terrorism and sanctions — remains a bigger question. Mr. Obama, in an early morning appearance at the White House that was broadcast live in Iran, began what promised to be an arduous effort to sell the deal to Congress and the American public, saying the agreement is “not built on trust — it is built on verification.” Mr. Obama made it abundantly clear that […]

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Arab World Split Over Iran Nuclear Deal

BEIRUT, Lebanon — The agreement between world powers and Iran over its nuclear program provoked sharp reactions Tuesday across the Arab world, with some hoping the diplomatic success would reduce tensions and others fearing it would empower Iran and increase instability. The deal added a new, unpredictable factor to a region where many major players are closely allied with or supported by either Shiite Iran or Sunni Saudi Arabia , and any gain by one is often seen as a loss by the other. For decades, the United States has been closer to the Saudi camp, so the agreement – and the great effort President Obama invested in reaching it – led parties on both sides to suspect it marked a strategic realignment, with the United States moving away from its traditional Sunni allies. That feeling has caused alarm in Saudi Arabia, which has long counted on its alliance […]

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Iran Is No Qatar, Even With World’s Second-Biggest Gas Reserves

CHART: Iran’s Gas Reserves Natural gas made Qatar’s citizens the richest in the world within a generation. Even with bigger fuel reserves, Iran will struggle to follow its neighbor’s path. Iran’s own production is consumed by a population of 78 million and an oil industry that injects gas into fields to boost productivity. Qatar, with a population of 2.3 million, now ranks second only to Russia in gas exports, generating about $86 billion last year. While Iran and world powers Tuesday reached a nuclear deal after almost two years of talks that would ease sanctions and allow more investment, the government in Tehran is contending with domestic gas demand that is doubling every decade. Iran holds 18 percent of the world’s gas and yet accounts for less than 1 percent of trade. “They have a huge domestic demand,” Jonathan Stern, head of the natural gas program at Oxford Institute […]

Posted On : Published By : Tom Whipple