MW: Oil set for third straight loss as Iran deal deadline nears
Oil futures headed for a third straight session loss on Friday, set for a weekly decline with traders concerned that a potential deal with Iran could add to oil’s oversupply glut.
August crude CLQ5, -0.44% fell 74 cents, or 1.2%, to $58.96 a barrel on the New York Mercantile Exchange. Tracking the most-active contracts, prices were down about 1.1% for the week.
August Brent crude on London’s ICE Futures exchange LCOQ5, -0.03% shed 51 cents, or 0.8%, to $62.69 a barrel, set to lose around 0.5% on the week.
“It appears as though investors are growing worried about the possibility of Iran flooding the already-saturated global oil market soon,” said Fawad Razaqzada, technical analyst at FOREX.com.
A final nuclear agreement between Western powers and Iran over the country’s nuclear program is due on June 30. A decisive pact is expected to pave the way for lifting Western sanctions and allowing additional Iranian crude to be exported to global markets.
In Iran, however, Supreme Leader Ayatollah Ali Khamenei has taken a harder line over his country’s nuclear program this week, putting at risk negotiations for a final agreement ahead of the deadline.
The outcome isn't certain, but “if sanctions over Iranian oil are lifted, this could have a major impact on oil prices,” said Razaqzada. Read: Iran may usher a quick return to $50 U.S. oil prices
Meanwhile, oil traders kept an eye on developments tied to Greece’s debt woes. European finance ministers have pushed talks over a Greek bailout deal to this weekend, after failure to reach an agreement this week, with Athens just days away from defaulting on a loan payment.
The situation in Greece has the potential to hurt energy demand from Europe, as well as move the euro EURUSD, -0.5711% —and in turn, the U.S. dollar DXY, +0.37% Commodities priced in dollars often trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.
Back on Nymex, July gasoline RBN5, +0.56% fell was little changed at $2.039 a gallon, while July heating oil HON5, +0.35% also traded nearly flat at $1.857 a gallon. Both were set to post declines for the week.
July natural gas NGN15, -2.00% was at $2.78 per million British thermal units, down 7 cents, or 2.5%. The contract, which expires at the end of the trading session, is down more than 1% for the week.
