(New York) Oil prices fell sharply again on Tuesday, crushed by the economic slowdown in China, but above all by the increasingly palpable prospect of an Iranian nuclear agreement, which would almost instantly free up some 100 million barrels.
Posted at 4:21 p.m.
The price of a barrel of American West Texas Intermediate (WTI) for September delivery fell 3.22%, ending at 86.53 dollars, its lowest closing level since January 25, almost seven months.
As for Brent from the North Sea, due in October, it dropped 2.90% to 92.34 dollars, its lowest closing level since early February.
For Robert Yawger, of Mizuho, this new stall is “mainly linked to Iran”.
European Union and United States officials were on Tuesday reviewing the Islamic Republic’s response to the EU’s proposed text to revive the Iran nuclear deal, along with requests for changes.
Although the Europeans initially presented their version of the document as “final”, discussions continued on possible amendments. “It looks like they are really trying to come to an agreement,” observed Robert Yawger.
If successful, “it’s the possibility of seeing a million barrels more per day on the market”, underlines the analyst, and more in the medium term.
At the time of the US withdrawal from the original deal in 2018, Iran was exporting around 2.45 million barrels a day, according to the US Congressional Research Service.
Having been unable to export freely for four years, the ninth-largest producer in the world (according to the American Energy Information Agency) could also quickly release some 100 million barrels already pumped.
“If the Iran nuclear deal is revived, it could push prices [du WTI] close to 80 dollars, ”advances, in a note, Edward Moya, of Oanda.
Added to this major development were poor macroeconomic indicators, including a further drop in investor sentiment in Germany, following disappointing figures in China, which showed a slowdown in the world’s second-largest economy.
“Demand forecasts have taken a hit,” said Edward Moya on the basis of these figures.
Sign of a reversal in the oil market, WTI is close to contango, a situation in which prices for later delivery are higher than spot prices. The scenario has not arisen since January 2021, before the massive deployment of the vaccine against COVID-19.
“At this point, you’re making money by storing barrels,” Robert Yawger explained.
While the black gold market is depressed, the gas market is sparking, ever more strained by the uncertainty relating to Russian deliveries to Europe.
The Dutch TTF, the benchmark for the European natural gas market, reached 252 euros per megawatt hour (MWh) on Tuesday, a first since the beginning of March. This equates to nearly $400 for a barrel of oil, at an equivalent amount of energy.
More worryingly, natural gas prices are now also soaring in the United States. The price of the main futures contract for September delivery soared more than 7% on Tuesday, the highest in three weeks.
The downturn in the United States is due to the low level of reserves, which have not been replenished despite the shutdown, since June, of a major gas terminal in Texas, reducing the export capacity of liquefied natural gas (LNG ) of 60 million cubic meters per day.