World Oil Prices Have Changed Dramatically

Quotes were affected by expectations of a deal between the U.S. and Iran.

On Thursday, May 15, world oil prices fell by more than 1 dollar. Quotes of "black gold" were affected by expectations of a nuclear deal between the United States and Iran (which means the lifting of sanctions on the latter), as well as an increase in crude oil reserves in the United States.

According to Reuters, futures for benchmark Brent crude fell by $1.49, or 2.3% - to $64.60 per barrel. While U.S. West Texas Intermediate (WTI) crude futures fell $1.46, or 2.3 percent, to $61.69.

"The new selling was driven by expectations that the U.S.-Iran nuclear agreement will ease recently tightened U.S. sanctions on Iran, which could affect the global oil supply-demand balance," Nomura Securities economist Yuki Takashima said.

Saudi Foreign Minister Faisal bin Farhan Al Saud said the kingdom fully supports the US-Iran nuclear talks and hopes for positive results.

While Washington imposed new sanctions against Tehran for two consecutive days. On May 13, about 20 companies belonging to the network, which has long supplied Iranian oil to China, fell under the restrictions. And on May 14, companies involved in the production of components for ballistic missiles were blacklisted.

In addition, the U.S. Energy Information Administration reported that crude oil stocks in U.S. storage facilities increased by 3.5 million barrels to 441.8 million barrels during the week. That defeated all analysts' forecasts, which had suggested inventories would fall by 1.1 million barrels.

Analyst IG Tony Sycamora says this is also putting pressure on prices, as is profit taking after oil prices jumped to the highs of their $55-65 a barrel price range. "My prediction is that we will continue to see a market range over the next month or so, however, unless there is an unexpected geopolitical shock, when the range gets out of control, the price will fall to $50 per barrel," the expert said.

Oil prices could also be hit by decisions by the Organization of the Petroleum Exporting Countries and related producers (OPEC+). The cartel members agreed to increase production, although on Wednesday OPEC lowered its forecast for the increase in oil production in the United States and other producers outside OPEC+ this year.

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