Crude futures experienced a decline on Thursday (June 8) following media reports indicating that the United States and Iran are nearing a potential nuclear deal. If such an agreement is reached, it would result in the easing of sanctions on Iran and allow for increased oil exports from the country.
WTI crude futures closed down $1.24, or 1.7%, at $71.29 per barrel, while BRENT crude futures saw a decline of 99 cents, or 1.3%, settling at $75.96 per barrel.
Earlier in the day, oil prices plummeted by over $3 as reports emerged of the US and Iran nearing a temporary agreement. Under the proposed deal, Iran would suspend uranium development projects and cooperate with the International Atomic Energy Agency (IAEA) in reviewing its nuclear programs. In exchange, Iran would be granted permission to export 1 million barrels of oil per day and gain access to funds generated from oil sales, which would be utilized for purchasing essential goods like food and medicine. This includes access to previously sequestered assets.
However, oil prices later experienced a negative turn after the US National Security Council denied the validity of the report, injecting uncertainty into the market.
Furthermore, the depreciation of the US dollar also played a role in the oil market dynamics during the day. The dollar index, which measures the value of the dollar against a basket of six major currencies, fell by 0.71% overnight. A weaker dollar typically benefits crude oil contracts, priced in dollars, as they become more affordable for investors using other currencies.
As the market closely watches the Federal Reserve’s (Fed) upcoming monetary policy meeting scheduled for June 13-14, most investors anticipate that the Fed will maintain interest rates at the 5.00-5.25% range during this meeting.
The oil market remains sensitive to geopolitical developments, particularly those related to Iran, as they have the potential to impact global oil supply and demand dynamics. Any progress or setbacks in the negotiations between the US and Iran will likely influence oil prices in the coming days.
The Spot Market is Open
Friday, June 9, 2023
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 11.00 | 70.89 | -0.40 | -0.56% |