Iran deal signals dip in New York oil prices
Oil prices in New York are falling for the second consecutive day. Brokers believe that announcements coming from Tehran are influencing the market. Specifically, Iran's indication of readiness for a nuclear agreement with the United States could result in eased sanctions on the Islamic Republic.
Oil prices on the New York exchange are dropping significantly. The signals from Iran suggesting an openness to a nuclear deal with the USA could enhance the global supply of the commodity.
A barrel of West Texas Intermediate oil for June delivery is currently priced at $61.49, representing a decrease of 2.63 percent. Meanwhile, Brent crude for July is priced at $64.40 per barrel, reflecting a decrease of 2.56 percent.
What exactly led to the change? US President Donald Trump, during his visit to the Middle East, expressed his readiness to reach a nuclear deal with Iran. However, he warned that the offer will not be available indefinitely. If rejected, he added, the US could apply immense pressure, potentially leading to a complete halt of Iranian oil exports.
Trump also emphasised that Iran must cease supporting terrorism and pursuing nuclear weapons.
In response to these declarations, Iran expressed willingness to sign an agreement under certain conditions. Ali Shamkhani, former secretary of the National Defence Council of the Islamic Republic of Iran, stated that Iran could commit to not possessing nuclear weapons in exchange for the easing of sanctions.
Perspectives on the oil market
Zhou Mi, an oil market analyst, notes that oil prices have been on a downward trend for the past two days. Increased oil deliveries by OPEC+ countries and geopolitical easing between the US and Iran improve the commodity supply outlook.
On the other hand, a ceasefire in the US-China trade war and the reduction of tariffs could lead to a rise in crude demand. Recently, there was a series of four days of rising oil prices in New York. However, Zhou Mi assesses that changes in US customs policy may only temporarily impact the demand for oil.
On Thursday, the International Energy Agency (IEA) will publish its latest estimates on global oil supply and demand.
