Oil prices re­bound in Asia on back of la­bor strike ces­sa­tion

The China Post - - WORLD BUSINESS -

Oil prices re­bounded in Asia Mon­day on news that a la­bor strike at a U.S. re­fin­ery would end soon, tem­per­ing re­cent losses fu­eled by an agree­ment to curb Iran’s nu­clear pro­gram.

U.S. bench­mark West Texas In­ter­me­di­ate (WTI) gained 90 cents to US$50.04 while Brent rose 69 cents to US$55.64 in af­ter­noon trade.

Prices fell sharply af­ter six world pow­ers and Iran agreed Thurs­day on a frame­work to rein in Tehran’s nu­clear am­bi­tions. Mar­kets were closed Fri­day for Easter.

The ten­ta­tive nu­clear deal, if con­firmed, would lead to the lift- ing of crip­pling eco­nomic sanc­tions against Iran and al­low its crude ex­ports back on the world mar­kets, which are al­ready over­sup­plied.

But Ni­cholas Teo, mar­ket an­a­lyst with CMC Mar­kets Sin­ga­pore, said Mon­day’s price re­bound was driven by news that union­ized work­ers at one of the re­main­ing five U.S. oil re­finer­ies still on strike had agreed to re­turn to work next week.

“This could pro­vide a fur­ther sup­port and pos­si­bly boost the WTI’s price,” Teo said in a mar­ket com­men­tary.

Also pro­vid­ing sup­port was news that ma­jor pro­ducer Saudi Ara­bia jacked up prices for all May sales to Asia, say­ing de­mand was im­prov­ing.

But Sanjeev Gupta, who heads the Asia-Pa­cific Oil and Gas prac­tice at pro­fes­sional ser­vices firm EY, said prices are likely to fall dur­ing the week as traders di­gest the im­pact of the agree­ment be­tween Iran and the U.S.-led west­ern pow­ers.

“We an­tic­i­pate stronger neg­a­tive re­ac­tions to the bench­mark prices this week,” Gupta said.

The out­line of the deal marked a ma­jor break­through in a 12-year stand­off be­tween Iran and the West, which has long feared Tehran wants to build a nu­clear bomb. Iran has in­sisted the nu­clear pro­gram is for peace­ful pur­poses.

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