Crude Oil futures extended overnight losses in Asia’s mid-morning trade on October 28, pushed by reports that Iran and Western countries would hold deeper discussions on the Asian country’s nuclear program by the end of November, paving the way for Iranian oil to return. Price pressure was also increased by reports of substantial inventory increases in the United States. As a result, the ICE December Brent futures contract was down $2.08/b (2.46 percent) from its previous closing of $82.50/b at 10:09 a.m. Singapore time (0209 GMT), while the NYMEX December light sweet crude contract was down $1.80/b (2.18 percent) to $80.86/b.
Late on October 27, Iran’s senior nuclear negotiator, Ali Bagheri Kani, said on Twitter that he had agreed to hold talks with six world countries on the country’s nuclear program by the end of November. On the same day, he held talks with his EU counterpart, Enrique Mora. An exact date will be announced next week, according to Bagheri Kani. According to some expert estimates, the talks might pave the way for easing sanctions, allowing up to 1.3 million barrels per day of Iranian oil to return to world export markets.
Following the news, oil prices dropped by more than 2% overnight. Analysts emphasized, however, that negotiations will be lengthy and unlikely to result in a speedy return of Iranian oil to the market. Investors also cited data from the US Energy Information Administration, which showed total commercial Crude Oil stocks increased by 4.27 million barrels to 430.81 million barrels in the week ending October 22.
In addition, stockpiles rose to their most excellent level since the week ending August 20, although they remained tight, falling 5.6 percent behind the five-year average. Meanwhile, gasoline inventories fell by 1.99 million barrels to 215.75 million barrels, while distillate inventories fell by 430,000 barrels to 124.96 million barrels.