WTI Crude Oil Receives Support – Upcoming Storm in Gulf of Mexico, Iran in Focus
WTI crude oil prices are climbing higher as fears about supply disruption due to a developing storm in the Gulf of Mexico region offset
As a brand new trading week gets underway, WTI crude oil prices are climbing higher as fears about supply disruption due to a developing storm in the Gulf of Mexico region offset market concerns about the possibility of Iran’s crude exports restarting soon. At the time of writing, WTI crude oil is trading at around $64.52 per barrel.
Over the past week, crude oil had come under pressure as Iran and the US restarted discussions towards limiting Iran’s nuclear program, which could potentially result in the lifting of sanctions against the oil producing nation. This, in turn, could drive back Iranian oil exports into global markets, potentially raising oil supply even as the demand outlook remains uncertain amid the ongoing coronavirus crisis.
However, on Sunday, Iran stated that the three-month monitoring deal with the UN’s International Atomic Energy Agency has expired, which could prohibit access to images from inside Iran’s nuclear sites. Hopes of finalizing an extension on the deal were dashed after both sides failed to reach an agreement, and experts say that this could derail discussions between the US and Iran as well, which would delay any possibility of the sanctions being lifted and Iran being allowed to export crude oil again.
Crude oil prices are also enjoying support from the formation of a low pressure system off the Gulf of Mexico which could turn into a cyclone and disrupt oil drilling and production activities in the region. However, gains from this news remain limited as market continue to be affected by the spike in fresh coronavirus cases across Asian countries, especially among leading energy consumers India and Japan.
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