Oil prices slip af­ter Iran-fu­eled rally

The China Post - - BUSINESS INDEX & -

Oil prices fell Tues­day, with profit-tak­ing in ev­i­dence a day af­ter the mar­ket ral­lied on doubts over an agree­ment with Iran over the crude pro­ducer’s nu­clear pro­gram, traders said.

U.S. bench­mark West Texas In­ter­me­di­ate ( WTI) for de­liv­ery in May dropped 64 cents to US$51.50 a bar­rel com­pared with Mon­day’s close.

Brent North Sea crude for May lost 46 cents to US$57.66 in mid­day trade.

The con­tracts had surged by US$3 each on Mon­day.

“The cur­rent decline

in

oil prices is most likely due to prof­ittak­ing,” Ken Hasegawa, en­ergy trad­ing manager at Newedge Group, told AFP.

An­a­lysts at­trib­uted the steep gains on Mon­day to in­vestors con­clud­ing that the nu­clear frame­work agreed be­tween Iran and in­ter­na­tional pow­ers will have a min­i­mal near-term ef­fect on global crude sup­plies.

The deal Tehran agreed with the United States, the United King­dom, China, France and Rus­sia plus Ger­many paves the way for the Is­lamic repub­lic to cur­tail its nu­clear ac­tiv­ity in ex­change for re­lief from pun­ish­ing eco­nomic sanc­tions, in­clud­ing on oil in­vest­ment.

“Most traders were wait­ing on Iran nu­clear talks to cause a flood in Ira­nian oil as sanc­tions get lifted,” said Daniel Ang, in­vest­ment an­a­lyst at Phillip Fu­tures in Sin­ga­pore.

“How­ever, the tone from the U.S. seems firm and this means that sanc­tions would only be lifted slowly,” he added.

Iran has the world’s fourth­largest oil re­serves but its ex­ports have fallen from more than 2.2 mil­lion bar­rels per day in 2011 to about 1.3 mil­lion be­cause of the U.S.-EU sanc­tions, which were put in place to pre­vent it build­ing a nu­clear bomb.

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