Brent sheds on US-Iran peace optimism

The front-month ICE Brent contract has declined by $3.76/bbl on the day, to trade at $104.98/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent’s price has felt upward pressure after the US Energy Information Administration (EIA) reported its weekly US oil inventory report.

US crude oil inventories declined by 7.9 million bbls to 445 million bbls in the week ending 15 May, according to data from the EIA.

“This [EIA inventory report] highlights tightening in the US market on the back of stronger oil exports, amid ongoing supply disruptions in the Middle East,” two analysts from ING Bank noted.

A decline in US crude stocks could indicate improved demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Brent crude’s price continues to remain highly reactive to Iran-related developments, with market participants putting significant weight on reports suggesting progress in US-Iran negotiations.

“Oil prices sold off heavily… with hopes growing once again for a potential US-Iran agreement,” ING Bank’s analysts said.

Washington is in the “final stages” of the ongoing negotiations with Tehran, Reuters reported citing US President Donald Trump as saying.

Trump’s remarks have put significant downward pressure on Brent’s price, market analysts said.

“As a result, ICE Brent settled more than 5.6% lower yesterday,” ING Bank’s analysts claimed.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online