On Tuesday, 9 August oil prices remain below US$ 100 per barrel on the commodity market, both for the light crude oil West Texas Intermediate (WTI) and for the North Sea Brent crude. According to commodity market analysts, prices are affected by traders’ and investors’ concerns regarding the supply of additional oil production to the market, thanks to renewed supplies of Iranian oil. A revival of the 2015 Iran nuclear deal would pave the way for a boost in oil exports to an already volatile commodity market.
On 8 August 2022, at 7:44 am CET, the WTI traded on the New York Mercantile Exchange (NYMEX) commodity market at US$ 90.85 per barrel with a daily increase of +0.08% so far. However, according to technical analysis data, this price still represents a year-round increase of +46.74% over the last 52 weeks, and since the beginning of this year there has been an increase of +26.47%. At the time mentioned the European counterpart of WTI oil, Brent crude traded on the Intercontinental Exchange Europe (ICE) commodity market at US$ 96.71 per barrel with a +0.06% price increase so far. According to technical analysis data, there has been an annual increase in the price of Brent oil of +50.16%.
According to analysts, the current decline is primarily due to progress in negotiations to re-establish the nuclear deal with Iran, which would open the way for Iranian oil to be supplied to the global commodity market. “The spectre of a U.S.-Iran nuclear deal continues to hover over the market,” ANZ Research analysts said in a note. The European Union put forward the “final” text to revive the 2015 Iran nuclear deal late on Monday, 8 August, awaiting approval from Washington and Tehran. A senior EU official said a final decision on the proposal was expected within “a very, very few weeks”. Commonwealth Bank analyst Vivek Dhar said in a note that “while the details around the timing of the resumption of Iran’s oil exports remain uncertain even if the accord is revived, there is certainly scope for Iran to increase oil exports relatively quickly”. He also added that Iran could boost its oil exports by 1 million-1.5 million barrels per day, or up to 1.5% of global supply, in six months.
“A revival of the 2015 nuclear accord will likely see oil prices fall sharply given that markets probably don’t believe a deal will be reached,” Dhar said.
However, signs that demand may not be dented as much as feared are keeping a floor under the market for now, following stronger-than-expected trade data from China on the weekend and the surprising acceleration in U.S. jobs growth in July. Traders will be watching out for weekly US oil inventory data, on Tuesday 8 August from the American Petroleum Institute and then Wednesday 9 August from the Energy Information Administration. Five analysts polled by Reuters expect crude stockpiles fell by around 400,000 barrels and gasoline stockpiles declined also by about 400,000 barrels in the week to 5 August, while distillate inventories, which include diesel and jet fuel, were unchanged.