Brent crude plummets after US-Iran thaw
The front-month ICE Brent contract has plunged by $4.24/bbl on the day from Friday, to trade at $65.84/bbl at 09.00 GMT.
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Upward pressure:
Brent has retained some ground after official drilling figures showed steadiness in US oil rigs. The total number of oil rigs remained unchanged over the week at 411, according to Baker Hughes.
The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening, or expected to happen, in the shale sector.
In a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.
Downward pressure:
Brent crude’s price has plunged by nearly $5/bbl at the start of this week, following reports that negotiations between Washington and Tehran have progressed.
US President Donald Trump said Iran is “seriously talking” with Washington, Reuters reported.
“The distinct shift in his [Trump’s] messaging has eased concerns of supply disruptions,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.
The news has eased geopolitical tensions with the OPEC member that could cut supply from the market, analysts said.
“The selloff follows reports of fresh US-Iran negotiations, raising the possibility of a deal and easing geopolitical risk premium,” two analysts from ING Bank said.
By Aparupa Mazumder
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