Oil prices dropped around noon on Thursday, after the United States removed some Iranian oil officials from its list of designated persons subject to sanctions.
As of 12:48 p.m. EDT on Thursday, WTI Crude was down 0.44 percent at $69.65 and Brent Crude was trading down 0.46 percent at $71.88.
The U.S. Department of the Treasury said on Thursday it is removing several Iranian officials from its list of designated persons, including three directors of the National Iranian Oil Company (NIOC).
Before the selling with the news of Iranian officials out of the sanctions list, oil prices were slightly higher after OPEC reiterated earlier today its forecast that global oil demand would jump in the second half of this year.
Global oil demand will rise by 6 million barrels per day (bpd) this year, led by strong consumption in China and the United States especially in the second half of 2021 with growing economies and border re-openings, OPEC said on Thursday, keeping its 2021 demand forecast unchanged from last month.
Before OPEC's monthly report was published, prices were lower as the market was still digesting the large fuel inventory build in the United States for the week to June 4. In gasoline, the EIA estimated on Wednesday an inventory build of 7 million barrels for the week to June 4. This compared with a build of 1.5 million barrels for the previous week.
"A third weekly reduction in crude stocks on rising refinery demand inadvertently led to a surge in gasoline and diesel stocks during a week were the rolling average of gasoline demand, despite the Memorial Day weekend, ticked lower for the first time in a month," Saxo Bank said on Thursday.
"Overall, not a game changer, with the subsequent market weakness probably more due to cautionary profit-taking after WTI failed to hold onto gains above $70," the bank's strategy team noted.
By Tsvetana Paraskova for Oilprice.com
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Comments
Iran is going for broke. Either a total lifting of US sanctions against it or no direct negotiations with the United States over the nuclear deal.
I strongly believe there will be no lifting of US sanctions even by 2023 or ever. The reason is that the positions of the United States and Iran are irreconcilable.
Moreover, supporters of the Islamic Revolutionary Guard Corps (IRGC) are going to have a landslide victory in the presidential elections on the 18th of June. They will do their very utmost to derail negotiations with the United States unless they get a deal on their own terms.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London