Oil futures: Crude rebounds after US denies Iran deal report
Quantum Commodity Intelligence – Crude oil futures in late afternoon London trade Thursday nosedived on reports that that the US and Iran are close to an interim deal on nuclear enrichment and oil exports, before staging a firm recovery.
Aug23 ICE Brent futures were trading at $75.80/b (1905 GMT), compared to the day's range of $73.58-$77.68/b and Wednesday's settle of $76.95/b.
At the same time Jul23 NYMEX WTI was trading $71.18/b, versus Wednesday's close of $72.53/b.
According to the London-based Middle East Eye, citing sources from Iran, discussion have taken place between US Iran negotiator Robert Malley and Iran's ambassador to the US.
However, prices recovered after spokesperson for the White House National Security Council called the article. "false and misleading," adding "any reports of an interim deal are false."
Meanwhile, the US Federal Reserve is expected to pause interest rates for the first time in over a year at its 13-14 June meeting, according to the majority of analysts, although wider economic concerns continue to weigh.
"US jobless claims came in higher than expected at 261k; this was up firmly from the previous week's 232k and marked the biggest jump in jobless claims since October 2021," said City Index analyst Fiona Cincotta. "Today's jobless claims suggest weakness is starting to seep into the labour market."
Saudi cuts
Opinion had been divided on whether Saudi Arabia's 1 million bpd production cut from July was enough to shore up prices, but with the possibility of an extension on cuts and OPEC+ set to crack down on compliance, supplies over the summer months are expected to tighten.
Markets earlier received a lift after latest data revealed Chinese crude oil imports jumped 12% on the year, as the world's largest crude oil importer brought in 51.44 million mt of crude last month, a figure equivalent to around 12.11 million bpd.
Crude imports also rose by 1.79 million bpd (+17%) on the month and 1.32 million bpd (+12%) on the year, the third highest volume on record.
"Demand slowdown from China has been a major concern for the crude oil market recently, and a recovery in oil imports is likely to provide some comfort to the oil market," said Warren Patterson, head of ING's commodity research.
This week's EIA data was not enough to move the needle either way, as the unexpected draw in crude stocks was offset by higher crude production and builds in gasoline and distillates.
"The EIA report posted a modest draw of 452,000 bpd, a bump in production, and strong demand for crude oil and gasoline. The report does highlight some bearish drivers as production hit the highest levels since April 2020 and as crude exports tumbled," said Ed Moya, senior market analyst at brokerage Oanda.
