OIL STEADY ON SUPPLY ODDS

OIL PRICES were stable around $90 (about R1 390) a barrel yesterday, as the prospect of increased supply from Iran and the US pressured the market.

Brent crude futures price edged up 44 cents, or 0.5 percent, to $91.22 a barrel by 5.04pm.

US West Texas Intermediate crude rose 28c, or 0.3 percent, to $89.64 a barrel.

The contracts slid about 2 percent on Tuesday as Washington resumed indirect talks with Iran to revive a nuclear deal.

An agreement could lift US sanctions on Iranian oil and quickly add supply to the market, although a number of vital issues need to be resolved.

“If US-Iran talks continue to progress, this level should come under some pressure, while a collapse of negotiations could be the catalyst that drives the price towards triple-figure territory,” said Craig Erlam, senior market analyst at Oanda.

Market sentiment took a hit from the latest monthly report from the Energy Information Administration (EIA), which raised its outlook for US crude production to average 11.97 million barrels per day this year.

Furthermore, industry worries over geopolitical risks appeared to reduce yesterday, several analysts said.

“The concerns about a further escalation of the Russia-Ukraine conflict appear to have eased somewhat following the latest diplomatic efforts, which is reducing the risk premium on the oil price,” said Commerzbank commodities analyst Carsten Fritsch.

French President Emmanuel Macron said on Tuesday he believed steps could be taken to de-escalate the crisis after a meeting with Russian President Vladimir Putin and called on all sides to stay calm.

The market has seen some support from bullish US inventory data.

US crude, petrol and distillate stocks fell last week, according to market sources citing American Petroleum Institute figures.