A removal of oil sanctions on Iran could see the country pump an additional 1.3 million barrels of oil per day, ING Bank head of commodities strategy Warren Patterson said in an emailed note. “The additional supply is expected to ease expected tightness in the market over the second half of next year,” he said.
That’s being reflected throughout oil’s forward curve. While the market is backwardated — a bullish pattern marked by near-term prices commanding a premium to later-dates ones — the gap has narrowed significantly.
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Brent’s December-December price spread dropped by 8 cents Tuesday to $6.92 a barrel, the lowest level since February. Meanwhile Brent’s prompt spread was last 77 cents in backwardation, compared with $2.08 at the start the month.
The European Union said it’s studying Iran’s response to a proposed blueprint for reviving the 2015 nuclear deal and consulting with the US on a “way ahead” for the protracted talks.
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