Crude-oil futures were trading somewhat lower Monday, after further cementation of a deal that could return some Iranian crude to the market and with weaker U.S. economic data and prospective Federal Reserve tapering of economic stimulus both on the agenda.
Brent crude for February delivery was down 52 cents, or 0.5%, at $106.72 a barrel on ICE Futures Europe. U.S. crude-oil futures were down 57 cents at $92.15 a barrel on the New York Mercantile Exchange.
Iran and six major powers reached an agreement over the weekend, which means a deal reached in November to curb Tehran's nuclear program will come into force Jan. 20. Next Monday will therefore mark the start of a six to 12-month period in which the conditions for a final nuclear agreement must be fulfilled.
In November Iran committed itself to eliminate its stocks of 20% enriched uranium within six months and limit the enrichment of uranium to 5%, explained JBC Energy in a note to clients. In return, Iran gets "an easing of sanctions that will give the country access to a reported $4.2 billion in oil revenues, realized in monthly installments," JBC said.
If Iranian crude flows back into the market in the coming months the excess supplies could mean a weaker price.
Though crude futures are down, the market's reaction to Friday's poor U.S. employment data is still unclear, according to analysts at PVM, a brokerage.
The number of new work positions created in December was just 74,000, the lowest in three years.
"Had the Fed been clairvoyant and known this would happen we can be confident that they would have held off on tapering," PVM wrote in a note to clients. The numbers "stunned the market and it did not know whether to put the [quantitative easing] cheerleader hat back on or have a fit of the glums about the economy," according to PVM.
The ICE's gasoil contract for February delivery was up $4.25 at $903.75 a metric ton, while Nymex gasoline for February delivery was down 78 points at $2.6613 a gallon.
