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On Wednesday, oil prices showed mixed trading and insignificant changes. Investors are still evaluating the possible global demand for oil. What is more, market participants are focused on the nuclear negotiations between the US and Iran. The talks may lead to the lifting of sanctions on oil supply from Iran.
At the same time, in the US and China, demand for oil continues recovering. However, the possible result of the talks puts pressure on oil prices.
Thus, at the beginning of the week, IAEA Director General Rafael Mariano Grossi said that the agency and Tehran had extended the agreement on the monitoring of Iranian nuclear facilities by international inspectors for a month (until June 24).
Most experts emphasize that market participants have already priced in the prospects of the Iranian deal after the first discussion in Vienna. They suppose that oil prices are still high ahead of a period of mounting demand and gradual lifting of quarantine measures in Europe and the US. In the long term, a successful vaccination program in the US may also boost oil prices. At the moment, more than 60% of the adult population received their doses. What is more, last week, the number of new virus cases increased just by 0.5%, showing the smallest increase since March 2020. However, analysts suppose that the consequences of the recent Covid-19 wave in India will have an effect on oil demand as early as this month. In April, oil imports were quite high and oil refiners managed to fulfill all the orders received earlier.
On Monday, May 31, the US will celebrate Memorial Day. Also, this day, the US citizens will open a car season. Analysts predict that demand for oil and oil products may surge.
According to the American Petroleum Institute, ahead of the opening of the car season, oil reserves decreased. Over the past week, oil reserves declined by 439 million barrels.
On Wednesday, the US Energy Department will disclose the oil reserves data for the previous week. Economists expect a drop of 2.2 million barrels, whereas petrol reserves may decline by 700 thousand barrels.
Early on Wednesday, Brent futures for July delivery added 0.06% to settle at $68.69 per barrel. Yesterday, Brent crude advanced by 0.3% to $68.65 per barrel.
At the same time, WTI futures for July delivery declined by 0.05% to $66.04 per barrel. On Tuesday, WTI closed with a rise of 0.03% to $66.07 per barrel.
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