Oil fell on Wednesday, supported by a possible return on Iranian supply, concerns about recovery prospects for US fuel demand, and a drop in weekly inventory forecasts.
Brent crude futures for July fell 6 cents, or 0.1%, to $ 68.59 as of GMT 0434, while West Texas Intermediate (WTI) crude oil fell 15 cents for July to $ 65.92.
Both benchmarks rose on Tuesday. The northern hemisphere reached its highest levels in a week during the upcoming summer driving season, and demand was fed with the lifting of coronavirus restrictions.
US crude oil and fuel inventories were seen to have declined last week, according to figures from the American Petroleum Institute on Tuesday. Crude oil stocks fell 439 thousand barrels in the week of May 21. According to sources, gasoline stocks fell by 2 million barrels and distillate stocks fell by 5.1 million barrels.
Investors have been paying attention to the Iran negotiations because the impact of the possible return of Iranian oil to the market is more important than other developments.
The Iranian government spokesman said he is optimistic that Tehran will soon reach an agreement with world powers to revive the 2015 nuclear deal, but Iran’s chief negotiator warned that serious problems remain.
Recent talks resumed in Vienna this week after Tehran and the United Nations nuclear agency expanded its monitoring agreement on the Middle East nation’s atomic program. Before the Iran nuclear talks become clear, it is very difficult for investors to make a decision.
Oil prices are expected to remain close to current highs, as the prospect of a rebound in fuel demand in the United States and Europe as jet fuel demand increases towards the end of this year will offset concerns about Iran’s return.
Analysts say if a deal is struck and sanctions are lifted, Iran could supply around 1 to 2 million barrels of additional oil per day.
Some investors argue that the market underestimates the recovery in demand, despite the resumption of Iranian supply, with the expectation that oil prices will rise to $ 80 per barrel in the fourth quarter.
