The possibility of a near return of Iranian oil weakens oil
The possibility of a near return of Iranian oil weakens oil.. Positive dealings in Wall Street
The possibility of a near return of Iranian oil weakens oil: Today, fears for the oil market have returned again,
amid waiting for Iranian-American talks and the start of June, as OPEC + will increase its supplies for the market.
In the stock market, the US indicators were dominated by green,
while the Asian Nikkei index broke the five-session winning series.
With Evest we can follow the first of all developments in commodity trading, currencies, and stock markets.
Oil retreated due to fears of the return of Iranian oil and the increase of OPEC+ production
Today, oil prices fell, in anticipation of increased supply due to new supplies from Iran and OPEC +.
The price of July futures for Brent crude in the London Futures Exchange
reached $68.47 a barrel, (0.58%) less than the closing price of the previous session.
The price of West Texas Intermediate crude oil futures for July delivery in the New York
Mercantile Exchange Nymex was $65.87 a barrel, $0.34 (0.51%) lower than the previous closure.
Investors expect increasing crude oil supplies from Iran and OPEC +.
Negotiators of the resumption of the comprehensive nuclear agreement regarding
the Iranian nuclear program, say’s that they have made progress.
Signing the document and lifting state sanctions will result in between one to two million barrels.
According to analysts, the possibility of returning Iranian oil
to the market hampers further growth in the black gold prices.
A three-month testing period on Iran
However, even after the lifting of sanctions, a three-month testing period
maybe imposed on Iran, during which Iranian oil supply growth will be limited to 500,000 barrels a day.
Analysts said that any increase in supplies from Iran would be gradual,
as JPMorgan estimated that Iran could add 500,000 barrels a day by the end of this year
and another 500,000 barrels by August 2022.
Markets continue to focus on Iran’s nuclear talks and whether
and when sanctions imposed on its oil exports will be fully lifted.
This will be an important theme for the next meeting of the Organisation
of Petroleum Exporting Countries (OPEC) and its allies, collectively called OPEC +,
on June 1, as producers will have to assess whether they are changing their plans to ease
production restrictions, with the possibility of returning the Iranian supply to the market.
OPEC + is expected to commit to its plans to replenish 700,000 barrels of oil a day during June,
but the group’s plan to increase supplies by another 840,000 in July “may be in question now”.
OPEC + planned to increase the supply of raw materials by about 2.1 million barrels a day by July,
which reduces total oil production to 5.8 million barrels a day.
The next Summit is scheduled for June 1st.
Support for oil prices on Wednesday
Support for oil prices came through data from the United States Department of Energy on Wednesday, as it showed a 1.66 million barrels decline in the country’s oil reserves last week.
Gasoline reserves declined by 1.74 million barrels, distillation outputs – by 3.01 million barrels.-+-
Demand for gasoline in the United States increased by 3% to reach 9.48 million barrels a day.
Low prices are influenced by the growing cases of Covid-19 infections in the Asian region.
The high number of Covid-19 cases in the Asian region, including India,
the world’s third-largest oil importer is negatively affecting demand expectations, which also limits prices.
However, the expectation that the increase in transportation use will be reflected
in fuel demand in the coming summer prevents lower prices.
On the other hand, most travel restrictions have been lifted from eurozone States,
which could revive oil demand during the coming period.
The Japanese Stock Exchange breaks the chain of consecutive gains
The Tokyo Stock Exchange ended slightly today, and it was punished with-profits
after a series of five positive sessions and a new extension of Japan’s emergency against Covid-19.
The main Nikkei index closed at 0.33% to reach 28549.01 points,
while the expanded Topix index dropped by 0.5% to reach 1911.02 points.
On Friday, the government is expected to decide to extend the current state of emergency until Monday in ten of the country’s 47 departments,
including Tokyo, which is scheduled to host the Olympic Games in less than 2 months.
On Wednesday, Tokyo Governor Yoriko Koiki indicated her intention to require
the central government not to lift the state of emergency.
This decision, which essentially provides for restrictions on bars and restaurants,
was already extended for 3 weeks during early May.
Then, It was extended to additional sections.
Japan has suffered a fourth wave of Corona infections since March,
but it has shown signs of weakness for 2 weeks now, with an average of about 4500 new cases a day over 7 days.
Analysts said that investors in Tokyo were also cautious ahead of major US indicators, including the new inflation measure for April on Friday and the manufacturing index ISM for May next
The Kospi index in South Korea is virtually unchanged at 3,168.74.
The Australian S&P/ASX 200 index rose by 0.3% to reach 7109.90 points.
Hong Kong’s Hang Seng Index fell by 0.2% to reach 20,106.10 points.
The Shanghai Composite index rose by 0.3% to record 3604.33 points.
A collective rise in Wall Street
In Wall Street, the Standard and Poor’s index closed at 0.2% higher,
after retailers and other companies dependent on consumer spending made strong gains.
Communications and equities have also helped to raise the market.
The gains have been tempered by declines in health care,
technology, and other equities.
Standard and Poor’s index rose by 7.86 points to reach 4295.99.
The Dow Jones Industrial Index rose by less than 0.1% to reach 34,323.05 points.
The Nasdaq index rose by 0.6% to reach 13,738 points.
The euro is stable against the American dollar
In the currency trading market, the euro was unchanged against the United States dollar,
at a rate of 1 euro to $1,2192. While the yen actually stabilized against the dollar,
the dollar rose to 109.12 yen, against 109.15 yen yesterday.
The euro rate against the yen has also barely changed, as the euro price reached 133.5 yen against 133.08 yen the previous day.