Brent Steady At $110 As Investors Wait For Clarification On Iran Deal
Brent crude oil was trading steadily at $110.97 at 5:30 GMT on Wednesday morning after choppy trading on Tuesday took the commodity lower. Oil prices have fallen under pressure recently as investors suss out the agreement between Western diplomats and Iranian leaders.
Although meetings between world powers and Iran resulted in a breakthrough over the weekend, most don't expect the deal to result in the easing of sanctions that are suppressing Iran's oil exports any time soon. As it stands, investors are looking for more data that will confirm whether or not we can expect to see Iranian oil flooding the markets in the near future.
Under the terms of the agreement, Iran has agreed to curb its nuclear development in exchange for the suspension of some of the West's sanctions. However, Iran's oil exports are expected to remain at their current level of about 1 million barrels per day for at least six months.
With the winter getting into full swing, oil is likely to be in higher demand as consumers heat their homes, but current trends have shown that the market is oversupplied. CNBC reported that most expect the US Energy Information Administration to report that US crude inventories rose by 600,000 barrels last week.
Crude found some support from supply disruptions in Libya, where protesters continued to halt the nation's oil exports. The country has seen it's oil production fall by more than half its normal capacity this year as labor protests have shut down some of the nation's largest oilfields. The problems have shown no sign of letting up, meaning that the North African OPEC member will likely ring in the new year shipping only a fraction of its oil.
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