Following signs of resistance from Europe and Asia to the possible decision of the United States for fresh sanctions on Iran - a major global crude expore4ter and this largest member of the Opec, there was some fall in the price of global crude which had touched 3-1/2-year high last week. this was also aided by the prospect of higher North American production of oil and gas because of increased U.S. drilling.
Brent crude was down 5 cents at $77.07 a barrel by 0920 GMT. U.S. light crude oil was down 5 cents at $70.65.
With the markets and investors anticipating a sharp decrease in the export of oil from Iran because of fears of new U.S threats on the country, the global crude oil prices touched its highest point since November of 2014. The prices of both the oil futures contracts were at $78 and $71.89 a barrel respectively last week.
There is however no confirmation of the severity of possible U.S. sanctions ion Iran and its oil industry. the manner in which some of the major oil consuming countries react to the U.S. sanctions on Iran would determine the severity of the sanctions that are expected to come into force after six months.
The nuclear between Iran and some of the Western powers such as China, France, Russia, Britain, Germany and Iran, in addition to the U.S. was designed to put controls on Iran’s nuclear program which resulted in the lifting of sanctions on the Iran by the western countries and provided an opportunity for companies to start business with Tehran. Despite the pull out of the U.S., the other signatories have remained firm with the deal.
While some market experts anticipate a reduction of 1 million barrels per day in Iranian oil exports, there are others who anticipate a much smaller drop of about as 200,000 bpd.
The global markets would see a reduction of 400,000-500,000 bpd of Iranian crude because of the U.S. sanctions, anticipates Michael Wittner, analyst at Societe Generale.
“In 2012 the reduction in Iranian crude production and exports was around 1 million bpd,” Wittner said. “This time around, we expect much less of an impact.”
It t is still “far from certain” that sanctions “will bite in the way intended”, said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
“Germany has said it will protect its companies from U.S. sanctions, Iran has said French oil giant Total has yet to pull out of its fields and all the while it seems the Chinese are ready to fill the void created by the U.S.”
In recent months, there has been a record demand from oil consuming countries in Asia and a tight supply in the global oil market because of the production curbs imposed on themselves by the OPEC and Russia which have driven oil prices high.
However, the markets fell after news of rising of U.S. drilling for new oil production.
“Soaring U.S. shale output will continue to put a cap on prices,” said Hussein Sayed, chief market strategist at futures brokerage FXTM.
(Source:www.reuters.com)
Brent crude was down 5 cents at $77.07 a barrel by 0920 GMT. U.S. light crude oil was down 5 cents at $70.65.
With the markets and investors anticipating a sharp decrease in the export of oil from Iran because of fears of new U.S threats on the country, the global crude oil prices touched its highest point since November of 2014. The prices of both the oil futures contracts were at $78 and $71.89 a barrel respectively last week.
There is however no confirmation of the severity of possible U.S. sanctions ion Iran and its oil industry. the manner in which some of the major oil consuming countries react to the U.S. sanctions on Iran would determine the severity of the sanctions that are expected to come into force after six months.
The nuclear between Iran and some of the Western powers such as China, France, Russia, Britain, Germany and Iran, in addition to the U.S. was designed to put controls on Iran’s nuclear program which resulted in the lifting of sanctions on the Iran by the western countries and provided an opportunity for companies to start business with Tehran. Despite the pull out of the U.S., the other signatories have remained firm with the deal.
While some market experts anticipate a reduction of 1 million barrels per day in Iranian oil exports, there are others who anticipate a much smaller drop of about as 200,000 bpd.
The global markets would see a reduction of 400,000-500,000 bpd of Iranian crude because of the U.S. sanctions, anticipates Michael Wittner, analyst at Societe Generale.
“In 2012 the reduction in Iranian crude production and exports was around 1 million bpd,” Wittner said. “This time around, we expect much less of an impact.”
It t is still “far from certain” that sanctions “will bite in the way intended”, said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
“Germany has said it will protect its companies from U.S. sanctions, Iran has said French oil giant Total has yet to pull out of its fields and all the while it seems the Chinese are ready to fill the void created by the U.S.”
In recent months, there has been a record demand from oil consuming countries in Asia and a tight supply in the global oil market because of the production curbs imposed on themselves by the OPEC and Russia which have driven oil prices high.
However, the markets fell after news of rising of U.S. drilling for new oil production.
“Soaring U.S. shale output will continue to put a cap on prices,” said Hussein Sayed, chief market strategist at futures brokerage FXTM.
(Source:www.reuters.com)