WTI slips from $90 on fears of slowing Chinese economy, strong dollar and progress in Iran nuclear deal talks

Crude oil futures closed lower on Monday (Aug. 15), driven by the appreciation of the dollar and weak economic data from China. Oil prices were also pressured by the prospect of progress in negotiations on the nuclear agreement with Iran, which will allow Iran to resume oil exports to the world market.

  • WTI crude futures fell $2.68, or 2.9%, at $89.41 a barrel.
  • BRENT crude futures fell $3.05, or 3.1%, at $95.10 a barrel.

Crude oil futures are pressured by the strong dollar. The dollar index against the six major currencies in a basket of currencies rose 0.87% to 106.5450. The strength of the dollar has made crude oil contracts quoted in dollars more expensive for investors holding other currencies.

The trading environment on the oil market was also impacted by weak Chinese economic data. Retail sales, for example, rose by only 2.7% year-on-year in July. China’s industrial production rose by only 3.8% in July.

Markets await progress on Iran nuclear deal negotiations. Hossein Amir Abdullahian Iranian Foreign Minister urges the U.S. to show more flexibility in resuming the nuclear agreement.

Iran’s official IRNA news agency reports that Iran and the U.S. could reach a partial agreement, with Iran willing to accept an offer from the EU if that offer provides guarantees for Iran’s demands.

Iran wants assurances that future U.S. presidents will not be able to terminate the nuclear agreement. If Iran and the current U.S. administration agree to the deal, the goal is to avoid a repeat of events.

Commonwealth Bank analysis has shown that if Iran and other world powers can reach a nuclear agreement, oil prices will fall sharply and Iran will be able to quickly resume exporting oil. The country is expected to increase its exports by 1.0-1.5 million barrels per day within 6 months.

The Spot Market is Open

Tuesday, August 16, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.40

88.90

-0.51

-0.57%

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