Analysts attributed the oil price drops to lingering concerns about crude oversupply and slowing demand coupled with uncertainty about Greece’s economy and Iran’s nuclear talks. Traders and investors reportedly grew increasingly pessimistic upon fears that Greece’s debt could slow European crude oil demand.
The extended deadline for an accord between Iran and Western powers concerning Iran’s nuclear program was July 7, and it generally was anticipated among most political observers that the deadline could be extended again.
If an agreement is reached, lifting of sanctions against Iran would eventually mean the return of Iranian oil to an already oversupplied world oil market, analysts said.
Separately, news reports indicated an oil-sale agreement between Iraq and the Kurdistan Regional Government appeared ready to collapse about 6 months after it was signed.
“The oil deal between Baghdad and KRG has reached a deadlock,” Kawa Mohammed, a Kurdish member of the Iraqi parliament’s Oil and Energy Committee, told the Wall Street Journal. If the deal falls apart, it could hurt Iraq’s efforts to fight the Islamic State.
The natural gas contract for August was down 6.6¢ to a rounded $2.76/MMbtu, marking its lowest settlement in more than a week. The Henry Hub, La., gas price was $2.74/MMbtu on July 6, down 5¢ from the last available price from July 2. US markets were closed on July 3 in observance of the July 4 holiday.
Heating oil for August dropped 13¢ to a rounded $1.71/gal. The price for reformulated gasoline stock for oxygenates blending for August dropped 11¢ to a rounded $1.92/gal.
The August ICE contract for Brent crude plummeted $3.78 to $56.54/bbl on July 6, while the September contract dropped $3.81 to $57.03/bbl. The ICE gas oil contract for July was down $18.75 to $536.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 6 was $55.76/bbl, down $2.58.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.