Oil prices fell sharply after news from the US
27 February 06:50
Global oil prices have fallen again amid negotiations between the US and Iran, as well as after a sharp increase in crude oil reserves in the United States. This was reported by Reuters, according to "Komersant Ukrainian".
On the evening of February 26, Brent futures fell by 95 cents (-1.3%) to $69.90 per barrel. West Texas Intermediate (WTI) futures lost $1.06 (-1.6%) and fell to $64.36.
Why oil prices are falling
The main factors behind the decline were:
- an increase in US oil reserves by 16 million barrels per week, according to the US Energy Information Administration;
- weakness in the physical oil market in the North Sea;
- anticipation of the results of the third round of negotiations between Washington and Tehran.
UBS analyst Giovanni Staunovo noted that the market is closely monitoring the progress of the negotiations, as their outcome could affect sanctions policy and global oil supplies.
US-Iran negotiations: what is known
Negotiations between the US and Iran are being mediated by Oman. Representatives of the parties described the meeting as “serious,” and the mediators said that “positive and creative ideas” were exchanged.
Markets are assessing whether diplomatic progress can reduce the risk of escalation over Iran’s nuclear program.
Previous price dynamics
Despite the current decline, Brent has risen by about 15% since the beginning of the year. This growth was driven by geopolitical risks and fears of a possible military conflict between the US and Iran.
At the same time, analysts warn of a possible supply surplus in the global market if sanctions pressure on Iran is eased.
What this means for the market
Lower prices may:
- affect fuel prices;
- adjust the revenues of oil companies;
- change the balance of supply and demand in global markets.
Investors will be closely monitoring news from the negotiation process and statistics on US reserves in the coming days.
