On Monday, oil futures rose over $1 per barrel after the Kingdom of Saudi Arabia increased its crude sales prices to Asian countries for the second consecutive month, and indication of an improved demand within the region.
Brent crude regained ground, following its plummet of more than 5% on Thursday after a preliminary nuclear deal was finally reached between Iran and world powers. Thus, more Iranian oil might enter the international markets if a comprehensive deal follows in June. However, the expectations of sudden increase in supply have strengthened after analysts gave a warning that ramp-up in exports might take months, most likely happening before 2016.
According to Morgan Stanley analysts, although there is a clear headline, there are still obstacles before a final deal is reached, including the complete lifting of sanctions. They do not expect any impact on the physical market before 2016.
In May, Brent crude delivery reached $56.90 per barrel from Thursday’s $56.45, up by $1.50. Similarly, U.S. crude delivery was at $50.63 per barrel. Due to the Easter holiday’s onset, there was no clearing in either U.S. or Brent crude futures on Friday.
A Chinese state trader will buy more condensate from the National Iranian Oil Company. Saudi cuts its selling pricesand keeps output steady, and might increase prices in April and May. Fighting in Yemen has also affected the prices.
Meanwhile, the number of oil rigs within U.S. decreased by 11 last week, down to 802, when it comes to the supply front. It is the smallest decline since December.
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