Oil prices fell on Tuesday as the US dollar gained ground, however, losses were limited as investors’ concerns over US President Trump’s threat to pull out of the Iran sanction relief deal underpinned the market. Anadarko photo.
Oil prices down over 2 per cent Tuesday
Brent oil prices fell over 2 per cent on Tuesday due to the rising US dollar which hit a near four-month high, however, losses were pared on investors’ concerns that US President Donald Trump will pull out of the Iran sanctions relief agreement.
By 2:08 p.m., EDT, benchmark Brent had fallen by 2.36 per cent or $1.76 to $72.93/barrel and US WTI was down 2.11 per cent, or $1.45 to 67.12/barrel. The Canadian Crude Index was down 76 cents to $50.206/barrel.
“The strength of the dollar is where the pressure is coming from,” Gene McGillian, vice president at Tradition Energy told Reuters.
But, McGillian added that the possibility that the Trump administration would pull out of the Iran deal helped buoy prices somewhat. Should the US abandon the Iran agreement, sanctions on Iran exporting its crude oil could be reinstated.
On Monday, a presentation by Israel’s Prime Minister Benjamin Netanyahu showing what he described as evidence of a secret Iranian nuclear weapons program helped boost oil prices.
Tehran has denied ever developing nuclear weapons when it signed the 2015 deal to curb its nuclear activity.
The BBC reports Iran’s foreign minister spokesman Bahram Ghasemi called Netanyahu an “infamous liar who has had nothing to offer except lies and deceits”. He added the accusations against Iran were “worn-out, useless and shameful”.
Iran’s Foreign Minister Javad Zarif said the documents produced by Israel were a rehash of old allegations which have already been dealt with by the UN’s nuclear watchdog, the International Atomic Energy Agency.
According to Reuters, UN nuclear inspectors have regularly reported that Iran is following the terms of the agreement.
Many oil industry analysts agreed with Zarif.
Olivier Jakob of PetroMatrix told Reuters that Netanyahu’s announcement “did not bring anything new to the table”. As a result, Monday’s gains in oil prices evaporated.