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Crude Oil Loses Gains on Supply Concerns

Summary:
Crude oil rallied earlier today, bolstered by the conflict between the United States and Iran. Yet by now, the commodity has lost its gains, trading firmly below the opening level. Market analysts speculated that the reason for the decline are concerns about weakening demand. Earlier this month, the International Energy Agency predicted that demand will fall this year. Specialists expect, though, that the OPEC+ production cut deal will continue to support oil prices. Indeed, Russian Energy Minister Alexander Novak said today that “today, more than ever, international cooperation is important”. With that said, he also stated that “it’s too early to say” whether the deal will be extended due to all uncertainties that can affect such decision. Elaborating further, Novak explained that talking

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Crude oil rallied earlier today, bolstered by the conflict between the United States and Iran. Yet by now, the commodity has lost its gains, trading firmly below the opening level. Market analysts speculated that the reason for the decline are concerns about weakening demand. Earlier this month, the International Energy Agency predicted that demand will fall this year.

Specialists expect, though, that the OPEC+ production cut deal will continue to support oil prices. Indeed, Russian Energy Minister Alexander Novak said today that “today, more than ever, international cooperation is important”. With that said, he also stated that “it’s too early to say” whether the deal will be extended due to all uncertainties that can affect such decision. Elaborating further, Novak explained that talking about uncertainties he primarily means the outcome of this week’s G20 meeting, demand for oil in the second half of the year, and impact on markets of the US sanction on Iran.

Contract for delivery of WTI crude oil in August went down 0.64% to $57.06 per barrel as of 16:02 GMT on NYMEX today. Futures for Brent crude slumped as much as 1.37% to $64.31 per barrel on ICE.


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Vladimir Vyun
Vladimir is an online journalist with background in computer science and work experience in pension funds. He contributes news reports, fundamental analysis and sentiment forecasts to TopForexNews.com and CommodityBlog.com. His main specialization is the currencies of emerging economies and inter-market correlations with commodity and bond trading.

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