The price of crude oil that increased on Tuesday,
but at a slower rate, fell again on Thursday by a modest amount. As of 09:30
GMT, the percentage fall of WTI and Brent were 0.55 and 0.44 respectively.
The price of crude oil dropped on Wednesday despite
the forecast of yet another fall in the US crude inventories. The API, American
Petroleum Institute, in its latest forecast, says that the US oil inventories
for the period ending July 9 have fallen by 4.079 million barrels.
The same data from the EIA, US Energy
Administration, is expected on Wednesday.
The API predicted a fall of 7.983 million barrels for
the week ending July 2. The EIA figure for the same period turned out to be
8.109 million barrels.
If confirmed by the EIA, it is going to be the 8th
successive weekly drop of the US crude oil inventories – and indication that
the traffic is back on the roads.
Analysts attribute the surprise fall of crude oil price
to a catalogue of factors that breed uncertainty in the markets.
An exponential increase in the Delta variant of the
Coronavirus is across the globe is a major concern, despite the deaths being
relatively low, compared to what we witnessed during the same period last year.
In addition, there are concerns over the estimated
GDP growth in China, although the trading with the rest of the world by China
has gone up by 32.3% in April, compared with the figure during the same period
in 2020; the total export amounted to $264 billion.
In addition, the possibility of resuming the talks
on reviving the JCPOA, 2015 Iran nuclear deal, is once again a source for
speculation.
Both Iran and Russia say that the signatories
managed to achieve 90% success. The backdoor discussions, between the US and
Iran over swapping prisoners, mainly reported in the Iranian media, are
potentially increasing the optimism about a breakthrough – in the end.
It is highly likely the talks will resume once the
new Iranian President, who has been hailed as a pragmatist, takes over the
administration in August.
The first task of a pragmatist will inevitably be
reviving the sector that brings in the most earnings. Since every single indication
shows the hope of the Iranian oil and gas sector in becoming a major
International player, the new administration, in all probability, will make
compromises to reach a deal on the JCPOA.
