Oil pares losses as market mulls Iran supply, weak economies
BNN Bloomberg
Oil recovered from early losses with the market weighing expectations of an increase in Iranian production and worsening prospects for global growth.
West Texas Intermediate rebounded over US$90 a barrel and is up for the day. Although talks between Iran and European Union negotiators indicated progress toward a renewed nuclear deal yesterday, discussions are not yet final.
WTI had fallen to a six month low on Monday on bearish US data, including a rapidly cooling manufacturing sector. This followed weaker-than-expected Chinese numbers. Investors are facing the prospect of rising supply as demand moderates; prompt and futures spreads are signaling concerns over tight global markets are easing.
A removal of oil sanctions on Iran could see the country pump an additional 1.3 million barrels of oil per day, ING Bank head of commodities strategy Warren Patterson said in an emailed note. “The additional supply is expected to ease expected tightness in the market over the second half of next year,” he said.
