Recent unexpected increase in US crude oil inventories has heightened investor concern about oversupply
15 May 2025 - 07:32
byYuka Obayashi and Emily Chow
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Tokyo — Oil prices fell more than $1 during trade on Thursday on the expectation of a potential US-Iran nuclear deal, while a surprise build in US crude oil inventories last week heightened investor concerns about oversupply.
Brent crude futures fell $1.49, or 2.3%, to $64.60 a barrel by 4.05am GMT. US West Texas Intermediate (WTI) crude futures slid $1.46, or 2.3%, to $61.69.
The both benchmarks lost about 0.8% on Wednesday.
Iran was willing to agree to a deal with the US in exchange for the lifting of economic sanctions, an Iranian official told NBC News in an interview published on Wednesday.
“Fresh selling was triggered by expectations that a US-Iran nuclear deal would ease recently tightened US sanctions on Iran, potentially loosening the global crude supply-demand balance,” said Yuki Takashima, economist at Nomura Securities.
Saudi Arabia fully supported the US-Iran nuclear talks and hoped for positive results, the kingdom’s foreign minister, Prince Faisal bin Farhan Al-Saud, said on Wednesday.
Washington issued sanctions on Wednesday to target Iranian efforts to domestically manufacture components for ballistic missiles, the US treasury department said, following Tuesday’s sanctions on about 20 companies in a network that it said had long sent Iranian oil to China.
The sanctions came after a fourth round of US-Iran talks in Oman aimed at addressing disputes over Iran’s nuclear programme.
The surprise rise in US inventories overnight was also weighing on prices as was profit-taking after crude oil rebounded towards the top of its recent $55-65 a barrel range, said Tony Sycamore, an analyst at IG.
“My forecast is we continue to see a range-bound market for the next month or so, however, barring an unexpected geopolitical shock, when the range does give way, it will be to the downside, towards $50 a barrel,” he said.
Data from the Energy Information Administration showed crude stockpiles rose by 3.5-million barrels to 441.8-million barrels in the week ended May 9, compared with analysts’ expectations in a Reuters poll for a 1.1-million-barrel draw.
API industry data also showed a large build of 4.3-million barrels in crude stocks last week, market sources said on Tuesday.
Oil cartel Opec and allied producers, known as Opec+, has been increasing supply, though Opec on Wednesday trimmed its forecast for growth in oil supply from the US and other producers outside the wider Opec+ group this year.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil slides on possible for US-Iran nuclear deal
Recent unexpected increase in US crude oil inventories has heightened investor concern about oversupply
Tokyo — Oil prices fell more than $1 during trade on Thursday on the expectation of a potential US-Iran nuclear deal, while a surprise build in US crude oil inventories last week heightened investor concerns about oversupply.
Brent crude futures fell $1.49, or 2.3%, to $64.60 a barrel by 4.05am GMT. US West Texas Intermediate (WTI) crude futures slid $1.46, or 2.3%, to $61.69.
The both benchmarks lost about 0.8% on Wednesday.
Iran was willing to agree to a deal with the US in exchange for the lifting of economic sanctions, an Iranian official told NBC News in an interview published on Wednesday.
“Fresh selling was triggered by expectations that a US-Iran nuclear deal would ease recently tightened US sanctions on Iran, potentially loosening the global crude supply-demand balance,” said Yuki Takashima, economist at Nomura Securities.
Saudi Arabia fully supported the US-Iran nuclear talks and hoped for positive results, the kingdom’s foreign minister, Prince Faisal bin Farhan Al-Saud, said on Wednesday.
Washington issued sanctions on Wednesday to target Iranian efforts to domestically manufacture components for ballistic missiles, the US treasury department said, following Tuesday’s sanctions on about 20 companies in a network that it said had long sent Iranian oil to China.
The sanctions came after a fourth round of US-Iran talks in Oman aimed at addressing disputes over Iran’s nuclear programme.
The surprise rise in US inventories overnight was also weighing on prices as was profit-taking after crude oil rebounded towards the top of its recent $55-65 a barrel range, said Tony Sycamore, an analyst at IG.
“My forecast is we continue to see a range-bound market for the next month or so, however, barring an unexpected geopolitical shock, when the range does give way, it will be to the downside, towards $50 a barrel,” he said.
Data from the Energy Information Administration showed crude stockpiles rose by 3.5-million barrels to 441.8-million barrels in the week ended May 9, compared with analysts’ expectations in a Reuters poll for a 1.1-million-barrel draw.
API industry data also showed a large build of 4.3-million barrels in crude stocks last week, market sources said on Tuesday.
Oil cartel Opec and allied producers, known as Opec+, has been increasing supply, though Opec on Wednesday trimmed its forecast for growth in oil supply from the US and other producers outside the wider Opec+ group this year.
Reuters
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