Oil Prices Crash With WTI Below $90 Again Amid Sluggish Demand and Iran Talks

Oil prices fell on Monday with Brent crude falling below $95 amid sluggish demand from China and reports that Western powerhouses and Iran may soon agree to a deal that would eventually boost the country’s oil trade.

Crude oil futures were down in mid-morning Asian trade on August 15 due to profit-taking after Brent markers temporarily retook $100 per barrel late last week on a wave of optimistic developments.

Currently, Brent crude is down $5.02, or 5.11 percent at $96.37 a barrel, while the US West Texas Intermediate (WTI) crude lost $4.80, or 5.21 percent, to sit at $87.29 per barrel after markets resumed trade in red on Monday.

Before today’s sharp decline, prominent energy analysts were skeptical about how far the recent increase in oil prices might go. Overall, sentiment in the global financial markets remained hazy, with varied forecasts indicating a mixed picture of the global economy.

On the supply side, some of the extraordinary tightness witnessed in recent months in oil markets has also eased. Traders are paying lower premiums for barrels for immediate delivery, and despite sanctions and controversial media reports, there has been no evidence of a substantial impact on Russia’s oil shipments.

It’s worth noting that fading inflation worries in the United States and improved economic and COVID circumstances in China have put a floor under the energy benchmark’s prices. Nonetheless, the hawkish atmosphere ahead of the Federal Open Market Committee (FOMC) Minutes on Wednesday appears to provide a challenge to the bulls.

While the worldwide demand is treading peaceful waters at the moment, oil supply could soar if Iran and the United States agree on a deal with the European Union to revive the 2015 nuclear deal, which would remove sanctions on Iranian oil exports and help stabilize the regional market for crude.