After reports that Iranian Crude Supplies can return to the market, the price of crude oil has remained under pressure. Even though investors have begun to act nervously on Friday, crude oil prices rose after taking a breather after three days of losses. Even though the crude oil price rose on Friday after three days of losses, the possibility of further decline remains.
Iranian Crude Supplies will return to the market, and if that happens, crude oil prices would most likely fall. Iran and world powers made progress in talks to resurrect a 2015 nuclear agreement, and Iran’s president said that the US was willing to lift sanctions on his country’s oil, banking, and shipping sectors.
Helima Croft from RBC Capital Markets said, “While the ink is not yet dry and outstanding issues remain to be resolved, significant progress appears to have been made in the ongoing nuclear negotiations in Vienna and around 1 million barrels per day of additional Iranian barrels looks set to potentially hit the market in the back half of this year.”
It’s also worth noting that recent COVID-19 outbreaks in Asia are a concern, and an increase in infection numbers could jeopardize the oil demand recovery. The good news is that vaccination programs will encourage more people to travel this summer; however, questions about the speed with which vaccination campaigns are being implemented in many parts of the world remain a concern.
The global economy is still struggling, but the Organization of Petroleum Exporting Countries predicts a more robust recovery in demand of Crude Supplies in the last six months of 2021.