The narrative of tight supplies that has driven crude’s rally since June has faded amid prospects that the US will ease sanctions on Iran and Venezuela, wrote Bloomberg.
In the physical market, Marathon Petroleum Corp. is shutting the third-largest oil refinery in the US after a fire.
Crude has had a volatile week, with prices often struggling for direction amid thin summer trading. Oil’s open interest is hovering near January lows, while the US Oil Fund ETF reported its biggest daily outflow since 2020 on Wednesday.
West Texas Intermediate futures settled below US$80 a barrel, cementing a 1.7 per cent weekly decline.
Prices pared some of this week’s drop on Friday as Federal Reserve Chair Jerome Powell’s speech on the path for interest rates largely matched traders’ expectations. In addition to Powell’s remarks, China unveiled a further easing of its mortgage policies to halt a slump in its ailing property market.
Crude is now trading roughly where it started the year, despite efforts by OPEC+ members Saudi Arabia and Russia to boost prices by curbing supply. Lingering expectations that the Fed isn’t completely done with its campaign of monetary tightening have also added to headwinds.
Iran’s production climbed to 3 million barrels a day in July, the highest level since 2018, according to the International Energy Agency in Paris.
Tehran expects to boost output to 3.4 million barrels in coming weeks, Oil Minister Javad Owji recently told the Iranian Parliament’s Energy Committee, according to Shana. That may increase to 3.6 million barrels by year’s end, according to people with direct knowledge of the matter.
Rebounding sales are one of the most tangible signs yet that Iran is reasserting itself on the global stage after starting to repair ties with regional rivals and foster relations with Asia’s leading