Oil prices fall before US data
US benchmark West Texas Intermediate (WTI) for delivery in May declined $1.13 to $52.85 a barrel.
Brent North Sea crude for May dropped 69 cents to stand at $58.41 a barrel around midday.
On Tuesday WTI rose $1.84 and Brent was up 98 cents on easing worries that Iranian crude will flood the market soon after last week’s nuclear deal with the West. Also providing support was news that Saudi Arabia had raised prices for Asia citing increased demand, analysts said.
Daniel Ang, an investment analyst with Phillip Futures in Singapore, said he saw elements of profit-taking in Wednesday’s trade, with an expected rise in US weekly crude inventories also dampening sentiment.
The US Energy Information Administration will release its stockpiles report, a closely watched barometer of demand in the world’s top oil consuming nation, later Wednesday.
“Fundamentals are still weak,” Ang said, referring to soft demand amid the global crude oversupply that has led to a collapse in prices since June.
Capital Economics said in a market commentary: “There is unlikely to be much additional Iranian oil hitting the market this year, even if a full (nuclear) deal is signed in June.
“Once sanctions have been lifted there could well be a surge in exports in the first few months as Iran sells its stores of oil, but ramping production up to previous levels is likely to take appreciably longer.”
US-led western powers and Iran said last week they had agreed on a framework that paves the way for Tehran to curtail its nuclear activity in exchange for the lifting of punishing economic sanctions.
Negotiators expect to agree a final deal by June 30.