Oil fell below $ 66 a barrel over fears the market could face a flood of Iranian barrels if sanctions against the Persian Gulf producer are lifted.

West Texas Intermediate has relaxed after rising nearly 7% in the past four sessions. While talks between Iran and world powers are underway in Vienna to revive a nuclear deal, traders await details of the negotiations, including sticking points, and the timing of any resumption of official flows.

Thursday’s price drop came despite further evidence that the recovery in US oil consumption is accelerating as the pandemic subsides. U.S. inventories of crude and gasoline fell last week, according to government figures released just before the start of the traditional summer driving season.

Oil has moved largely sideways since March after a surge earlier in the year, with investors weighing rising demand in the United States, Europe and China against lower consumption in parts of Asia where the coronavirus remains strong. At the same time, the OPEC + alliance is now easing the brakes on production, and Iran talks could usher in a return of supply if the nuclear deal is passed.revived.

“The market still doesn’t know how the Iranian problem will play out,” said Daniel Hynes, senior commodities strategist at Australia and New Zealand Banking Group Ltd. “The outlook remains positive, with easing restrictions likely to boost travel. However, the exact timing of any additional Iranian oil could make a big difference.

Prices
  • WTI for July delivery fell 0.4% to $ 65.96 a barrel on the New York Mercantile Exchange at 7:16 a.m. in London.
  • Brent for July settlement fell 0.4% to $ 68.58 on the ICE Futures Europe exchange.
  • The quick lead time for Brent was 12 cents in demotion, down from 32 cents at the start of last week.

The ministers of the Organization of the Petroleum Exporting Countries and its allies are due to meet on June 1 to assess the state of the market and their production policies. Citigroup Inc. has said that given the Iranian talks, the group could stick to its intention to increase production again next month, butrethink the increase set for July.

In the United States, inventories of distillate – a category that includes diesel – fell last week to the lowest since April 2020, according to the Energy Information Administration. A four-week moving average of gasoline supplied, meanwhile,exceeded 9 million barrels per day for the first time since March of last year.

Memorial Day weekend at the end of May usually heralds the start of the summer driving season. However, gasoline stocks are low and set the stage for aSupply squeeze is typically only seen when a hurricane destroys refineries, according to a fuel distributor.

Other market news:
  • Freshly hit on the boards of the world’s largest oil companies, the climate movement has a clear message: the energy transition is underway and there is no turning back.
  • In the lastDesperate attempt to deal with fuel shortages, Venezuelan government officials are trying to reuse two petroleum upgraders to make it a main ingredient for gasoline instead.
  • Total SE and Chevron Corp.suspend the distribution of cash by a joint venture that has a Burmese state-owned enterprise as a shareholder.

– With the help of Andrew Janes



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