Oil prices ended lower on expectations that Iran’s historical nuclear deal with the world powers would see increased exports from the Islamic country worsening the glut and growing inventories at a Cushing.
Light sweet crude for August delivery fell $1.63 or 3.1% to end at $51.61 a barrel on the New York Mercantile Exchange. Based on the most active contracts, this is the lowest the US benchmark’s prices have been since April 9.
Brent for August delivery, the global benchmark, slipped $1.46 or 2.57% to end at $57.05 a barrel on the ICE Futures Exchange in London.
Oil prices had opened higher in morning trading but pared gains after traders priced in the impact of the deal between the world powers and Iran and data from the US showing an unexpected growth in stockpiles.
Tuesday’s deal between Iran and the world powers to curb its nuclear program is expected to see the United States, the United Nations and the European Union lift economic sanctions against Iran.
Once sanctions are lifted, analysts expect the country to double its oil exports in less than two months worsening the global glut.
Also pressuring oil prices was data by oilfield services provider Genscape showing that stockpiles at Cushing, Okla., am important delivery and storage point for the benchmark Nymex contract , increased last week.
“Another build at Cushing would be bearish for U.S. crude, and the Buzzard outage and contract expiration are supporting Brent,” Phil Flynn, analyst at Price Futures Group in Chicago, told Fox Business.
The US energy Information Administration reported a drop in crude supplies for the week ending 11th June but the news failed to improve market sentiment.
According to the EIA, crude inventories in the US fell by 4.3 million barrels for the week, exceeding the 1.8 million drop consensus estimate by analysts polled by the Wall Street Journal.
The EIA also reported a 66,000 barrel drop in production in the country and gasoline stockpiles grew by an expected 100,000 barrels.
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