Oil Falls 2 on Possible Return of Iranian Supply

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Oil prices fell more than 2 per cent on Thursday, marking a third day of losses, after diplomats said progress was made toward a deal to lift US sanctions on Iran, which could boost crude supply.

Brent crude fell US1.55, or 2.3 per cent, to settle at US65.11 a barrel. West Texas Intermediate crude ended US1.31, or 2.1 per cent, lower at US62.05 a barrel. Both contracts fell around 3 per cent in the previous session.

Iranian President Hassan Rouhani said in a televised speech that sanctions on oil, shipping, petrochemicals, insurance and the central bank had been dealt with in the talks.

That really weighed on sentiment and that pushed us down a little bit, said Phil Flynn, senior analyst at Price Futures Group in Chicago. There39;s room in the global market for more Iranian oil but in the short term that39;s what is weighing on us today. But European diplomats said success was not guaranteed and very difficult issues remained, while a senior Iranian official contradicted the president.

Indian refiners and at least one European refiner are reevaluating their crude purchases to make room for Iranian oil in the second half of this year, anticipating that US sanctions will be lifted, company officials and trading sources said.

With global oil demand growth projected to be healthy for the balance of this year and in 2022, the Opec producer group is in a relatively comfortable position to deal with increasing Iranian output without undermining the oil rebalancing, PVM…

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