Despite the powerful start of oil last week.. Crude is weekly retreating

Despite the powerful start of oil last week.. Crude is weekly retreating:

Last Friday, oil prices rose owing to prevailing optimism in the market about the outlook for oil demand and the situation in India, as oil refineries increased their oil imports to just over 10% on an annual basis in April,
according to Montiel, the foreign news portal.

News of progress in negotiations about the Iranian nuclear program is blocking oil prices.

Evest is following up on the oil conditions on a weekly basis through exclusive reports.

The price of Brent crude contract for June delivery reached about $66.4 a barrel,
while the US West Texas Intermediate crude was around $63.6 a barrel.

According to Reuters

Reuters, an analyst of ING Bank, in a comment on what is happening in the oil market,
said “balance between supply and demand is a supporting factor”.

He added, “the latest trade data from India showed that the refineries imported an increase of 10.3% on an annual basis in April.

It is also more than it was in March when imports reached 4.32 barrels a day.

ING analysts noted that oil imports to India increased despite the pressure on oil
demand caused by the last wave of Covid-19.

Oil in a week

Last week, the oil began to rise sharply, as the two contracts passed the $70 and $67 threshold in a row on Tuesday, the first since early March, before falling sharply on Wednesday and Thursday.

Oil prices rose after two consecutive days of losses at the end of Friday’s dealings
when a storm was made in the Gulf of Mexico.

On Friday, the US National Hurricane Centre announced that the weather system
that is formed in the Western part of the Gulf of Mexico has a 40% chance of becoming
a hurricane in the next 28 hours.

This initial storm prompted traders to buy crude before the weekend in anticipation of a potential production shutdown.

However, oil prices recorded a weekly decrease as investors prepared to resume Iranian crude supplies after the country and world powers made progress on the nuclear agreement.

Over the week, US crude futures retreated by 2.7%, while Brent crude futures declined by 3.3%.

The most notable downside during the week was the progress in the Iranian-American talks, as the Iranian oil industry is under US embargo, but improved relations between Washington and Tehran could lead to the easing of these sanctions and thus reach the market which is already struggling to sell its shares significantly.

Iranian nuclear negotiators, who concluded a new round of talks in Vienna on Wednesday, reported “a tangible progress”, saying that they noticed an emerging agreement.

On Thursday, the International Atomic Energy Agency (IAEA) made discussions with Iran on continued control of nuclear facilities, to allow negotiations to continue to save the 2015 Agreement.

Why did oil rise sharply in the first session last week?

The news stated that China’s industrial production growth is strongly to increase expectations by improving demand for crude oil, resulting in rising global prices during the last May 18 session,
which led to the raise of light crude prices to a higher level.

According to data released by China’s National Bureau of Statistics,
the country’s industrial output growth in April reached 9.8% on an annual basis in 2020.

This growth was in line with expectations but low.

It still shows that China’s economic picture is still recovering.

This has reinforced expectations for improved demand for energy consumption, including crude oil.

In addition, the weakening of the US dollar, and the fall in the price of Bitcoin,
were among the factors that led to the rise of oil prices on May 18.

However, when concerns about oil supply increased and global demand for crude oil
was unlikely to improve, world oil prices declined sharply.

The market is optimistic before next summer’s season.. The nuclear agreement is a barrier

Demand for oil is expected to rise, especially as in Europe the level of highway traffic is close to the level of 2019.

The same can be said for the United States,
as citizens now wish to move with ease on the roads after the easing of the restrictions on moving.

Despite growing market optimism, driven, for example,
by a rapid recovery in demand for Petroleum products in the United States and the assumptions of similar developments in the OECD countries during the coming months, the interim reports of the Iranian nuclear program are impeding further price increases.

News about the progress of negotiations on the Iranian nuclear agreement is likely to continue to affect oil prices.

Iran began to enrich Uranium above the maximum permitted of 3.67% after the withdrawal of the United States of America from the reached agreement in 2015, during the era of president trump, in 2018.

On Thursday, Iranian President Hassan Rohani suggested that the United States should remove the sanctions imposed on Iran, including those of oil exports.

Rohani was quoted by local media as saying that “the main part of the agreement was concluded”.

Analysts estimate that removing sanctions will mean that Iranian oil exports could reach 3 million barrels a day by the end of the year.

For its part, the largest Indian oil refinery has already announced that it will start buying Iranian oil if the United States sanctions are lifted.

Notable progress in vaccination

In the United States, according to data from the Centers for Disease Control and Prevention,
58% of adults and nearly 46% of the country’s population received at least one dose of the Covid-19 vaccine,
and up to 34% of US residents received a full dose of the Covid-19 vaccine.

Tourism activities have become active in other countries, such as Russia, the United States,
and Portugal.

It also contributes to increasing confidence in the likelihood of restoring energy demand and thus assisting in high oil prices.

Despite the powerful start of oil last week

Despite the powerful start of oil last week.. Crude is weekly retreating

Related Topics