EU and Iran Resume Nuclear Negotiations
October 28, 2021
A brief meeting between the EU and Iran lead to the news that nuclear negotiations would resume in November. If an agreement can be reached the thought is that the US will stop sanctions against Iran, and they could bring an additional 1.6 million barrels of production to the market. This would be bearish for energy prices. High gasoline prices may make the US more willing to negotiate but the track record is not very good so we will see.
Propane inventories showed another build this week of 2 million barrels. Prices have seen a good pullback and export have scaled back helping US inventories to build. China also slowed its buying, but all of this is likely short-lived.
Crude oil and refined fuel product prices were down more than 2% in yesterday’s trading after reaching seven-year highs. The main price driver was a bearish EIA weekly inventory report that showed a larger build in total US crude oil stocks and drops in implied demand for both gasoline and diesel. Also, after hitting highs not seen in 7 years and the market pulling back this accelerated the profit-taking.
Crude stocks were up 4.3 million barrels and Cushing, Okla. crude stocks were down 3.9 million barrels. Cushing barrels are at the lowest since October 2018. Gasoline stocks fell by 2 million barrels and are now at almost a four-year low. Distillates inventories fell by 400,000 barrels.