Fall in oil prices in Asian trade due to Iran talks op­ti­mism

The China Post - - BUSINESS INDEX & -

Oil prices fell in Asia Wed­nes­day af­ter Rus­sia and Iran’s for­eign min­is­ters claimed a break­through in talks over Tehran’s con­tro­ver­sial nu­clear pro­gram that could ease sanc­tions on the crude pro­ducer.

U. S. bench­mark West Texas In­ter­me­di­ate ( WTI) for May de­liv­ery eased 15 U. S. cents to US$ 47.45, while Brent crude for May fell five cents to US$ 55.06 in af­ter­noon trade.

“The nu­clear talks with Iran ex­tended over the dead­line. How­ever, it seems to lean to­wards an agree­ment,” said Daniel Ang, in­vest­ment an­a­lyst with Phillip Fu­tures in Sin­ga­pore.

“Iran pro­duces a high vol­ume of crude and if the sanc­tions are even­tu­ally lifted, this will push both the WTI and Brent down­wards for a pro­longed pe­riod,” he said.

Rus­sia’s Sergei Lavrov and Iran’s Mo­ham­mad Javad Zarif said Wed­nes­day that they and for­eign min­is­ters of five other ma­jor pow­ers would work through the night to agree the main out­line of what they hope will be an his­toric ac­cord.

The United States, China, United King­dom, Rus­sia, France and Ger­many hope a full agree­ment, due to be fi­nal­ized by June 30, will see Iran scale back its nu­clear ca­pa­bil­ity to pre­vent Tehran de­vel­op­ing nu­clear weapons un­der the guise of its civil­ian pro­gram.

In re­turn, diplo­mat­i­cally iso­lated Tehran, which de­nies want­ing atomic weapons, is de­mand­ing the lift­ing of sanc­tions that have stran­gled its econ­omy.

A dead­line of mid­night on Tues­day was scrapped af­ter the U. S. in­sisted enough progress had been made to war­rant ex­tend­ing the marathon talks.

With the world’s fourth- big­gest oil and sec­ond- big­gest gas re­serves, the en­ergy in­dus­try is the cor­ner­stone of Iran’s econ­omy, but it has been hit hard by the Amer­i­can and Euro­pean em­bargo im­posed since 2012.

Crude deal­ers, mean­while, are await­ing the lat­est of­fi­cial U. S. stock­piles re­port to be re­leased later Wed­nes­day for clues about de­mand in the world’s top con­sumer, an­a­lysts said.

Oil re­serves likely rose by 4.2 mil­lion bar­rels in the week end­ing March 27, ac­cord­ing to a sur­vey by Bloomberg News.

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