NEW YORK (IFN) - World oil prices shot higher on Monday (Tuesday morning GMT), as investors doubted that the nuclear deal between Iran and world powers last week will soon increase the supply of crude oil.
The benchmark US light sweet crude or West Texas Intermediate (WTI) for delivery in May, rose three dollars to close at 52.14 dollars a barrel on the New York Mercantile Exchange.
The European benchmark, Brent crude for May delivery, increased 3.17 dollars to settle at 58.12 dollars a barrel in London.
Oil prices have fallen on Thursday on news of the initial agreement between Iran and the international powers that paved the way for Tehran to reduce its nuclear activities, in exchange for leniency, including economic sanctions on oil investments.
But on Monday, traders concluded the agreement in the near future will not have an impact on the supply of crude oil, such as quoted by AFP.
"There is a realization that Iranian oil will not flow into the world market in the near future," said Bart Melek, head of commodity strategy at TD Securities.
Phil Flynn, an analyst at Price Futures Group, said there are still many hurdles to sanctions against Iran revoked. Such a move would require additional negotiations with Iran, as well as permission from international weapons inspectors and some sort of resolution in the US House, where Republicans have balked at the agreement.
"Maybe one year at the beginning that we would see that the Iranian crude oil hit the market, and at that time the excess supply of oil will be reduced," said Flynn.
Iran deal was "title bearish for oil prices," said a note Morgan Stanley. "However, the settlement details in June will be difficult. Even if successful, a little oil is expected by the end of the year."
Analysts said the oil market also received support from the news that Saudi Arabia raised the price of crude oil shipments to Asia.
The benchmark US light sweet crude or West Texas Intermediate (WTI) for delivery in May, rose three dollars to close at 52.14 dollars a barrel on the New York Mercantile Exchange.
The European benchmark, Brent crude for May delivery, increased 3.17 dollars to settle at 58.12 dollars a barrel in London.
Oil prices have fallen on Thursday on news of the initial agreement between Iran and the international powers that paved the way for Tehran to reduce its nuclear activities, in exchange for leniency, including economic sanctions on oil investments.
But on Monday, traders concluded the agreement in the near future will not have an impact on the supply of crude oil, such as quoted by AFP.
"There is a realization that Iranian oil will not flow into the world market in the near future," said Bart Melek, head of commodity strategy at TD Securities.
Phil Flynn, an analyst at Price Futures Group, said there are still many hurdles to sanctions against Iran revoked. Such a move would require additional negotiations with Iran, as well as permission from international weapons inspectors and some sort of resolution in the US House, where Republicans have balked at the agreement.
"Maybe one year at the beginning that we would see that the Iranian crude oil hit the market, and at that time the excess supply of oil will be reduced," said Flynn.
Iran deal was "title bearish for oil prices," said a note Morgan Stanley. "However, the settlement details in June will be difficult. Even if successful, a little oil is expected by the end of the year."
Analysts said the oil market also received support from the news that Saudi Arabia raised the price of crude oil shipments to Asia.
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