Oil prices retreated on Friday after wild swings during the week, as the prospect of extra supply from Iran returning to the market outweighed fears of a possible Russian invasion of Ukraine, which could disrupt supply.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Brent crude futures fell 68 cents, or 0.7%, to $92.29 a barrel at 0124 GMT, extending a 1.9% drop from the previous session.

U.S. West Texas Intermediate (WTI) crude futures shed 67 cents, or 0.7%, to $91.09 a barrel, after sliding 2% in the previous session.
 

See Zee Business Live TV Streaming Below:

Both benchmark contracts were headed for their first weekly fall in nine weeks after hitting their highest points since September 2014, with a deal taking shape to revive Iran`s 2015 nuclear agreement with world powers.

Diplomats said the draft accord outlines a sequence of steps that would eventually lead to granting waivers on oil sanctions. That would bring about 1 million barrels a day of oil back to the market, but the timing is unclear.

"Nevertheless, the spectre of a potential 1 million b/d hitting the oil market saw Brent crude oil prices come under pressure," ANZ Research analysts said in a note.

Analysts do not expect prices to fall much in the near term, even with the prospect of a return of more Iranian oil, with the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, struggling to meet their production targets.

"Oil markets are vulnerable to supply disruptions given global oil stockpiles are tracking near seven-year lows and as OPEC+ spare capacity comes into question given disappointing OPEC+ supply growth," Commonwealth Bank (CBA) analyst Vivek Dhar said in a note.

With oil demand also recovering as air travel and road traffic picks up, CBA sees Brent holding in the $90 to $100 a barrel range in the short term and topping $100 "quite easily" if tensions escalate between Russia and Ukraine.

U.S. President Joe Biden is set to host a call on Friday on the Ukraine crisis with the leaders of Canada, France, Germany, Italy, Poland, Romania, Britain, the European Union, and NATO, the office of Canada`s Prime Minister Justin Trudeau said.