Total US crude oil inventories were at 463.9 million barrels end last week.
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“The dollar recovered from its lows and there is just a negative mood in commodities and for oil there is the worry that the global economy is going to affect demand”, said Phil Flynn, analyst at Price Futures Group in Chicago. “Therefore, if and when Iranian oil exports begin to come back to the market, they should put further downward pressure on prices”, Pugh said.
European benchmark Brent oil for September delivery fell 91 cents to $56.13 a barrel in London.
The Chicago Board Options Exchange Crude Oil Volatility Index, a measure of price fluctuations closed at 38.46 on Thursday, the highest level since July 10.
US crude reached $49.63 before retreating to $48.21, the lowest front-month intraday price since April 2.
“We’ve had a lot of supply”, says Tom Kloza, global head of energy analysis for the Oil Price Information Service.
Crude oil prices have fallen in the last year because of protracted over-supply and weak demand, which is being exacerbated by the Greek crisis and the Chinese stock market fall as well as an expectation that the U.
The deal which aims to prevent Iran from building a nuclear weapon – allows for the lifting of crippling economic sanctions on the country, enabling it to ramp up shipments of oil. The contract had settled at its lowest since early April at $55.27, down 86 cents.
Oil tumbled, approaching a bear market in New York as U.S. stockpiles increased, adding to a glut.
“The oil market has been hit by another whammy”, Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees about $128 billion of assets, said by phone.
Moreover, Iran’s Oil Minister, Bijan Namdar Zanganeh, stated on Monday that the country will look to recapture the market share it had lost due to the trade sanctions.
Meanwhile, natural gas working inventories were 2577 Bcf on 26 June, which was 35% higher than a year earlier and 1% higher than the previous five-year average of 2010 through 2014, thus keeping gas prices at continued lows.
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Oil prices could find additional support if the world’s top exporter Saudi Arabia cuts production after the summer in reaction to lower seasonal domestic demand, as stated in a report by an industry publication yesterday.
