Crude Oil Futures Edge Higher as Iran, U.S. Negotiations Continue
Crude oil futures edged higher in early European trading on Monday as attention turns toward negotiations over Iran's nuclear power program.
The Wall Street Journal on Monday reported that the talks were likely headed for an extension, and that the negotiating teams would reconvene next month. The report cited a senior Western diplomat.
A final agreement could mean that Western sanctions on Iranian oil production would be lifted, adding to the global glut of oil.
Beyond that, the market is keenly focused on the meeting of the Organization of the Petroleum Exporting Countries later this week in Vienna.
OPEC is under pressure from producers to reduce output and prop up crude oil prices, as it often has done in the past. But there is a great deal of doubt as to whether the cartel--especially top exporter Saudi Arabia--will rein in production to try to prevent prices falling further.
Crude oil prices have fallen more than 30% since June as supplies remain plentiful and demand has been disappointing, as many of the world's major economies are struggling.
Saudi Arabia hasn't given any indication there will be production cuts soon, leading to speculation that the Middle Eastern nation is prepared to accept lower prices to ensure it can maintain its share of the global oil market.
"Analysts are split down the middle on whether OPEC will meaningfully cut production," says Commonwealth Bank of Australia.
Still, U.S. investment bank Morgan Stanley says the market shouldn't ignore oil-producing countries that aren't members of OPEC.
"Non-OPEC producers could help rebalance oil markets. Russia's foreign minister announced last week that Russia is willing to cooperate with Saudi Arabia on issues related to energy and oil markets, and that oil-producing countries were entitled to react adequately if prices were being artificially driven," notes the bank.
January Brent crude on London's ICE Futures exchange was 0.1% higher at $80.60 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in January were flat at $76.46 a barrel.
ICE gas oil for December changed hands at $706.50 a metric ton, up 0.3% from Friday's settlement.
- The Wall Street Journal
- Published on:
- November 24, 2014
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