Oil prices steady awaiting Iran deal

13th July 2015, Comments 0 comments

Oil prices were stable Monday as markets waited to see whether Iran and western powers would agree a landmark deal that would lift sanctions on Tehran and lift crude exports.

US benchmark West Texas Intermediate for August delivery was up 13 cents at $52.87 barrel compared with Friday's close.

Brent North Sea crude for August slipped 22 cents to stand at $58.51 a barrel in late London deals.

Despite earlier optimism, there is little possibility that Iran and major powers will agree a historic nuclear deal before Monday night's deadline, an Iranian source told AFP.

Asked if reaching a deal Monday was now out of the question, the source close to the Iranian delegation said that there was only a "low chance".

Iran's President Hassan Rouhani was to address the nation Monday on state television amid reports a nuclear deal with world powers could be imminent.

Rouhani's appearance is scheduled for around 10:00 pm (1730 GMT) the official said, noting that the president would talk about the negotiations taking place in Vienna.

Any deal to curb what the West suspects as Iranian efforts to build an atomic bomb will result in the lifting of punishing economic sanctions, allowing the country to resume oil exports.

More Iranian oil however will add to a supply glut, which has depressed prices.

OPEC on Monday revised upward its forecast for global crude oil demand growth for this year and also predicted a further increase for 2016 as the world economy picks up again.

But the Organization of the Petroleum Exporting Countries warned that oil output would also continue to increase this year, which means the current supply glut and low prices are likely to remain unchanged until next year.

In its July monthly report, OPEC said it expected global oil demand to increase by 1.28 million barrels per day -- some 100,000 barrels more than in its June estimates.

OPEC's latest figures differ from those of the International Energy Agency, which indicated last week that world oil demand growth would fall to 1.2 million barrels a day in 2016, from 1.4 million this year.

Oil prices collapsed 60 percent between last June and January when it hit a low of $45. This in part was owing to excessive supplies caused by the boom in US shale oil.

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© 2015 AFP

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