Crude oil prices closed lower on Friday (Feb. 18) under pressure from progress in talks on the Iran nuclear deal. This could allow Iran to resume exporting oil to the world market.
- WTI crude futures were down 69 cents, or nearly 0.8%, at $91.07 a barrel.
- BRENT crude futures were up 57 cents, or 0.6%, at $93.54 a barrel.
The oil market fell after reports that an agreement on nuclear talks with Iran is close.
Ned Price, the spokesman of the State Department, confirmed that the talks are on the final stretch,
“Our assessment is that we are in the midst of the very final stages of, as I said before, a complex negotiation with the key stakeholders here,” adding, “This is a decisive period during which we’ll be able to determine whether a mutual return to compliance with the JCPOA [Joint Comprehensive Plan of Action] is in the offing or if it’s not.”
Analysts at ING estimate Iranian oil production at 2.5M barrels per day at the moment, but capacity is said to be 3.8M barrels per day,
“Iran is currently producing at around 2.5MMbbls/d but is estimated to have a capacity of closer to 3.8MMbbls/d. Therefore, over time there is the potential for 1.3MMbbls/d of additional supply to come onto the market. This would only reinforce our current view that oil prices should trend lower through the year.”
However, investors continue to closely monitor the development of tensions in Ukraine, a factor that will support oil prices.
The U.S. ambassador to the Organization for Security and Cooperation in Europe (OSCE) said Russia has now increased its troop strength near the Ukrainian border to 190,000.
“We assess that Russia probably has massed between 169,000-190,000 personnel in and near Ukraine as compared with about 100,000 on Jan. 30,” adding, “This is the most significant military mobilization in Europe since World War II.”Michael Carpenter said
Mainstream media reports that the Russian army will conduct nuclear exercises tomorrow. It will be launched with both ballistic missiles and cruise missiles. According to statements, this will be a demonstration of Russian military power.
The Spot Market is Closed
Saturday, February 19, 2022