Author: AubreyOrlando

Crude oil prices rose more than +5% last week on heightened geopolitical uncertainties. Division between Iran and the 5 permanent members of UNSC plus Germany (P5+1) raised concerns over whether a final nuclear deal can be reached. Indeed, even if an agreement is signed, the process of lifting oil sanctions would be longer than previous anticipated. Meanwhile, conflict between Saudi Arabia and Yemen has shown no signs of moderation.

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Weekly Fundamentals – Uncertainties in Iranian Nuclear Deal Support Crude Prices

IMF’s downgrade of its global economic forecasts weighed on crude oil prices amidst concerns that the oversupply condition would be aggravated. Iran’s warning that crude oil price could fall to US$25/bbl without OPEC’s output cuts damped sentiment further. The front-month contract for WTI crude oil fell to as low as 45.89 before ending the day at 46.39, down -4.73%.

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IMF’s Downgrade Sent Crude Prices Even Lower

Crude oil prices extended the fall as the pre-OPEC talk between some OPEC members and Russia failed to sort out the ways to defend price decline. Although Russia’s Rosneft announced it had cut its daily output by -25K bpd because of “market conditions”, the amount was insignificant to reverse the situation. The front-month contract for WTI crude oil slumped to a 2-week low of 73.71 before ending the day at 74.09, down -2.23%. The Brent crude contract plunge to as low as 78.05 before settling at 78.33, down -1.69%.

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Crude Price Slumped as Pre-OPEC Meeting Failed to Find Resolution