Oil futures: Brent, WTI crude tumble 3-4% on Iran progress, inflation fears

London (Quantum Commodity Intelligence) – Crude oil futures retreated sharply Wednesday on a combination of rising Covid-19 infections across Asia, US inventory data and reports of progress in the latest round of Iranian talks, although prices rebounded from the lows during volatile trading conditions.

Brent futures for front-month July were trading at $66.10/b (1525 GMT), compared to Tuesday's settle of $68.71/b, a fall of 3.8%, having reached a low of $65.30/b.

At the same time June WTI was trading $62.69/b, down 4.28% from Tuesday's settle of $65.49/b.

Prices earlier reached a session low $61.95/b.

Media reports Wednesday said that talks between Iran and the international community were making progress, prompting speculation that Iranian exports will increase during the summer.

The Russian envoy at the Iran nuclear talks was quoted as saying a deal was 'within reach'.

Meanwhile, crude oil inventories showed a lower than expected build in the week ending 14 May, according to data released by the Energy Information Administration, rising 1.3 million barrels versus expectations of a 1.6-million barrel build.

Prices were already in a downtrend throughout the day with inflationary pressure triggering fears of a US rate rise.

The fall in crude came against the backdrop of a "risk-off" day, with major stock markets falling by more than 1% and the safe haven of gold rising by a similar amount.