Oil benchmarks fall over 1%

Crude oil was down at the start of the London session on Thursday after news broke about both France and Iran stating that they were closer to an agreement to salvage Iran’s 2015 nuclear deal with world powers.

This news coupled with the de-escalation of the Ukraine-Russia spat has caused the oil benchmarks to fall and possibly head to their first weekly drop in eight weeks.

The Global benchmark, the Brent oil futures is down 1.31%, currently trading $93.57 a barrel while the United States’ benchmark, the West Texas Intermediate (WTI) futures is also down 1.15%, currently trading $92.59 a barrel. Both Brent and WTI futures are still trading above the $90 mark.

On Wednesday, France explained it was just days away from reviving Iran’s 2015 nuclear deal with world powers and that it was now up to Iran to make the political choice. However, Tehran appealed for Western powers to be “realistic.”

Claudio Galimberti, senior vice president at Rystad Energy explained to Reuters, “Positive news from the U.S.-Iran nuclear negotiations is providing much-needed relief to global oil prices, as the possibility of new crude supplies reduces the supply-demand deficit.”

Asides from this, another factor affecting the price of oil is data on the U.S crude oil supply that was released yesterday. The U.S. Energy Information Administration (EIA) revealed a buildup of 1.121 million barrels in the week of February 11. Forecasts prepared by Investing.com had predicted a 1.572-million-barrel draw, while a 4.756-million-barrel-draw was recorded during the previous week.

Crude oil supply data from the American Petroleum Institute (API), released on Tuesday, showed a draw of 1.076 million barrels.

In recent weeks, investors are advised to keep an eye on Russia’s threatening posture toward Ukraine, as concerns that any supply disruptions from the major producer in an already tight global market could push oil prices to $100 a barrel. (Nairametrics)