Oil Prices Stable at $90 a Barrel But Iran Supply Prospects Add Pressure

Rowena Edwards
Wednesday, February 9, 2022

Oil prices were stable around $90 a barrel on Wednesday but the prospect of increased supply from Iran and the United States kept pressure on the market.

Brent crude futures edged down 36 cents, or 0.4%, to $90.42 a barrel by 1150 GMT.  U.S. West Texas Intermediate crude fell 43 cents, or 0.4%, to $88.93 a barrel.

The contracts slid about 2% on Tuesday as Washington resumed indirect talks with Iran to revive a nuclear deal.

An agreement could lift U.S. sanctions on Iranian oil and quickly add supply to the market, although a number of vital issues still need to be ironed out.

"Oil price sentiment has thus far been dominated by a tightening imbalance so little wonder that the prospect of increased supply sent prices in reverse," PVM analyst Stephen Brennock said.

Market sentiment also took a hit from the latest monthly report from the Energy Information Administration, which raised its outlook for U.S. crude production to average 11.97 million bpd this year.

Furthermore, industry worries over geopolitical risks appeared to reduce on Wednesday, according to several analysts.

"The concerns about a further escalation of the Russia-Ukraine conflict appear to have eased somewhat following the latest diplomatic efforts, which is reducing the risk premium on the oil price," said Commerzbank commodities analyst Carsten Fritsch.

French President Emmanuel Macron said on Tuesday he believed steps could be taken to de-escalate the crisis after a meeting with Russian President Vladimir Putin and called on all sides to stay calm.

However, the downward pressure on prices has been somewhat limited by bullish U.S. inventory data.

U.S. crude, gasoline and distillate stocks fell last week, according to market sources citing American Petroleum Institute figures on Tuesday.

Crude inventories fell 2 million barrels, according to API, versus analysts' expectations of a 400,000-barrel increase.

More data from the U.S. EIA will be available at 10:30 a.m. EST (1530 GMT). 

(Additional reporting by Florence Tan in Singapore; Editing by Kirsten Donovan)

Categories: Energy Middle East Industry News Activity Production Oil Price

Related Stories

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas-Eni Upstream Joint Venture to Take Up to Two Years to Set Up

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

Petrovietnam, Petronas Extend PSC for Offshore Block

CNOOC Sees 11% Profit Growth in 2024 Driven by Record Oil Production

‘Ultra-Mega’ Offshore Deal for L&T at QatarEnergy LNG’s North Field Gas Scheme

CNOOC Starts Production at Two New Oil and Gas Projects

Valeura Wraps Up Infill Drilling Campaign in Gulf of Thailand

Current News

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com