WTI, Brent on hopes of U.S.-Iran deal despite Tehran pushback
APA Corporation’s Beryl Alpha oil platform in the North Sea.
Courtesy: APA Corporation
Oil prices fell on Friday after US President Donald Trump said Washington had reached a framework agreement with Iran, raising hopes that the conflict in the Middle East was nearing an end.
US crude oil Futures contracts for July delivery fell 1.65% to $86.26 per barrel, while international benchmark August futures contracts fell to $86.26 per barrel. Brent It lost 1.55% to $88.98 per barrel in early Asian trading.
Speaking in the Oval Office, Trump said he expected an agreement to be signed “within the next few days,” claims he has made repeatedly during the conflict. He also said that the Strait of Hormuz would be reopened if an agreement was reached.
Brent oil
Earlier in the day, Trump said he was canceling planned U.S. military strikes on Iran, citing talks with Tehran that had been “taken to the highest level of Iranian leadership and approved.”
Tehran withdrew Trump’s claim after Iranian state broadcaster Fars reported on Telegram that Tehran had not approved any draft text for the first memorandum of understanding with Washington.
In a later post, Fars called Trump’s statement a step back from his previous military threats and said Trump did not offer any new elements beyond an offer Iran had already made.
“The truth is that so far not only Iran has not given a final response, but it is also the United States that has returned to its previous demand,” Fars said in a translated post. he said. According to Fars, “Of course, given that the United States has accepted the text proposed by Iran, there seems to be a possibility that this text will be reexamined.”
BMO Capital Markets said oil prices have remained surprisingly in check despite recent new US-Iran attacks, with ongoing diplomatic efforts, alternative shipping routes around the Strait of Hormuz and a sharp decline in Chinese crude imports helping offset geopolitical risks.
Citi also reiterated in a note on Friday that a sharp decline in Chinese crude imports has helped moderate oil prices since the beginning of the Middle East conflict, easing fears of a bidding war for supplies. The bank estimates that China can keep imports close to 8.7 million barrels per day without significantly depleting stocks; This suggests that demand from China may not provide a big boost to prices in the near term.
