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31 Mar 2015
Iran talks pose downside risks for crude – KBC
FXStreet (Barcelona) - The KBC Bank Research Team argues that with the deadline for a conclusion of talks on Iran’s nuclear programme today, downside risks for oil are more than the upside risks from the ongoing Yemen conflict.
Key Quotes
“The front-month contract on Brent settled little changed yesterday even though the oil price was seen in sight of 55 USD/bbl during the most of the session.”
“Later in the evening, comments of a spokeswoman of the US State Dept indicated that the odds that a deal between world powers and Iran on its nuclear programme would be reached were about 50:50. The deadline for a conclusion of talks is today.”
“As we already pointed out last week, we think that the talks pose more downside risk for oil price than is the upside risk stemming from Saudi Arabia’s air strikes in Yemen.”
“Let us recall that if the agreement was reached, the oil market would have to cope with as much as 1 million barrels per day of oil than now (more realistic estimates however talk about a half of that volume). The probability that the sanctions will be lifted all at once is, however, low.”
“More likely scenario therefore is a gradual removal of import bans in case the deal was reached."
“In any case, due to the western sanctions on imports of oil from Iran, the country’s production fell deep below 3 million barrels per day.”
Key Quotes
“The front-month contract on Brent settled little changed yesterday even though the oil price was seen in sight of 55 USD/bbl during the most of the session.”
“Later in the evening, comments of a spokeswoman of the US State Dept indicated that the odds that a deal between world powers and Iran on its nuclear programme would be reached were about 50:50. The deadline for a conclusion of talks is today.”
“As we already pointed out last week, we think that the talks pose more downside risk for oil price than is the upside risk stemming from Saudi Arabia’s air strikes in Yemen.”
“Let us recall that if the agreement was reached, the oil market would have to cope with as much as 1 million barrels per day of oil than now (more realistic estimates however talk about a half of that volume). The probability that the sanctions will be lifted all at once is, however, low.”
“More likely scenario therefore is a gradual removal of import bans in case the deal was reached."
“In any case, due to the western sanctions on imports of oil from Iran, the country’s production fell deep below 3 million barrels per day.”