Title: Oil headed for weekly fall, prospect of Iran deal stokes fears of extra supply
Feb 18, 2022 02:35AM ET
Oil prices extended their losses on Friday and headed for a weekly decline as the prospect of additional supply from Iran returning to the market was overshadowed by fears of possible supply disruption due to Russia's invasion of Ukraine.
Brent crude futures fell 65 cents, or 0.7%, to $92.32 a barrel at 0725 GMT, extending a 1.9% decline from the previous session.
U.S. West Texas Intermediate crude futures fell 71 cents, or 0.7%, to $91.05 a barrel after falling 2% in the previous session.
Both benchmark contracts hit their highest levels since September 2014 on Monday, but are headed for their first weekly decline in nine weeks following news of an emerging deal to revive the 2015 Iran nuclear deal with world powers.
Diplomats said the draft deal envisages a series of steps that would eventually lead to the lifting of oil sanctions. That would return about 1 million barrels of oil a day to the market, but the timing is unclear.
But analysts do not expect prices to fall significantly anytime soon, even with the prospect of more Iranian oil, as the Organization of Petroleum Exporting Countries and its allies, known collectively as OPEC+, struggle to meet their production targets.
Given the recovery in oil demand as well as the resurgence in air and road transport, the CBA expects the price of Brent crude to remain in the $90-100 per barrel range in the short term, and to exceed $100 "very slightly" as tensions between Russia and Ukraine escalate.
Pro-Russian rebels in Ukraine on Friday accused government forces of shelling a village, while Russian media reported that more infantry and tank units were returning to their bases, refuting Western fears of an imminent Russian invasion.