MARKET WATCH: Iran nuclear deal will have ‘little’ short-term impact on oil markets

The historic nuclear agreement signed by Iran and the Western powers may have little effect on the short-term oil market outlook, according to an analyst with Douglas-Westwood in London.

“Iran’s oil export ceiling remains firmly restricted at 1 million b/d, significantly lower than the pre-sanctions level of 2.5 million b/d,” said Douglas-Westwood’s Timoth Madden. “The limited relief on sanctions will make it easier for buyers to purchase Iranian crude as they can now access insurance for shipping cargoes, meaning the 37 million bbl of oil loaded in Iranian tankers stranded at sea may now more easily be absorbed by the market. Meanwhile, Asian importers are now more likely to maintain Iranian import levels as sanction waivers become easier to obtain,” Madden added.

He said, “The limited leeway on the current sanction regime will allow Iran to maintain export sales at 1 million b/d, a potential 20% increase on the average realized last year. However, the impact of these additional barrels on the market is negligible. The real effect of Iran’s potential return to the fold will only become clear in 6 months’ time when the extent and longevity of the current accord is confirmed.”

Energy prices

The New York Mercantile Exchange January crude contract gained 42¢ on Nov. 29 to close at $92.72/bbl. The February contract increased 38¢, settling at $93.01/bbl.

Heating oil for December delivery edged up less than a penny to settle at a rounded $3.05/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for December delivery declined 1.42¢ to a rounded $2.68/gal.

The January natural gas contract on NYMEX added 5.9¢, settling at a rounded $3.95/MMbtu. On the US spot market, the gas price at Henry Hub, La., closed at a rounded $3.78/MMbtu on Nov. 29. No price was posted for Nov. 28 because of the Thanksgiving holiday in the US.

In London, the January ICE contract for Brent crude oil dropped $1.17 to settle at $109.69/bbl. The ICE gas oil contract for December rose by $1 to $943/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes closed at $107.07/bbl on Nov. 29, a 27¢ drop from Nov. 28.

Related Articles

Western gulf lease sale attracts $110 million in high bids

08/20/2014 Gulf of Mexico western planning area Lease Sale 238 drew 93 bids from 14 companies over 81 blocks covering 433,823 acres, totaling $109,951,644 in ...

TSB report outlines ‘multitude of factors’ behind Lac-Megantic train derailment

08/20/2014 A multitude of factors led to July 6 derailment of a runaway train in Lac Megantic, Que., carrying 72 carloads of Bakken crude oil bound for Irving...

USCG proposes higher offshore oil spill liability limits

08/20/2014 The US Coast Guard proposed higher offshore oil spill liability limits under the 1990 Oil Pollution Act to reflect significant increases in the Con...

Lawler to lead BP’s US Lower 48 onshore business

08/20/2014 BP PLC has appointed David Lawler as chief executive officer of its Houston-based US Lower 48 onshore business that’s slated to formally become a s...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected