FXStreet (Barcelona) – The KBC Bank Research Team gives an oil market update, and further expects the ongoing Greek debt crisis and Iranian nuclear talks to keep oil prices pressured to the downside.
Key Quotes
“The oil price fell by about 2% on Monday as jitters related to situation in Greece weighed on overall market sentiment. Price of the front-month contract on Brent therefore fell to a four-week low. Meanwhile, Reuters physical oil market data have confirmed earlier news about persisting overhang of supply in the Atlantic Basin as both CFD’s and Forties differentials are seen close to a multi-year lows.”
“Apart from Greece, the market focuses on possible signs of agreement between P5+1 countries and Iran on its nuclear program. Though no details are known yet (or at least we are unaware of any), the general conclusion is that the talks are likely to extend beyond the self-imposed deadline of 30th June. Let us recall that if the deal was reached, Iran could export as much as 30 – 40 million barrels of oil that is said to be kept in floating storage and could in the short term increase its oil production by more than 500 thousand barrels per day.”
“Both Greek debt saga and Iranian nuclear talks thus in our view pose a downside risk for oil prices. Moreover, a fresh round of negotiations between Libya’s internationally recognized government and self-declared one about reopening of pipelines blocked by protesters could support oil bears even further.”
(Market News Provided by FXstreet)