By Barani Krishnan
Investing.com - Crude prices fell 2% on Tuesday, pausing its rally for a second day in a row, on the notion that Iran could add to global supplies if it manages to clinch a nuclear deal with Washington and other world powers to get U.S. sanctions off its oil.
Also pressuring crude somewhat were expectations that the American Petroleum Institute, or API, could announce a build in stockpiles of both U.S. crude and gasoline for last week in an inventory snapshot due after market hours.
New York-traded West Texas Intermediate settled down $1.96, or 2.2%, at $89.36 per barrel. WTI has lost almost $3, or just over 3%, since Friday’s settlement. Prior to that, it rose for seven straight weeks, rising 30% and hitting a 2014 high of $93.17.
Some analysts have projected that WTI could continue sliding to between $85 and $82 in coming days if headlines remained positive about a deal on the Iran talks.
London-traded Brent, the global benchmark for oil, was settled down $1.91, or 2.1%, at $90.78 per barrel. Brent has lost 2.7% since Friday’s settlement. Prior to that, it rose 27% over seven weeks, hitting a seven-year peak of $93.70.
Talks on reviving the 2015 Iran nuclear deal will resume in Vienna in 10 days after some progress this week, with the United States restoring some sanctions waivers.
Washington wants Iran to fully dismantle its nuclear program which Western inspectors say is advancing towards atomic bomb capability. Tehran denies the notion, saying its nuclear facilities are only for power generation and is demanding a full removal of sanctions on its oil exports and a guarantee of no further punitive steps
On the U.S. inventories side, the API will release at 4:30 PM ET (21:30 GMT) data that usually serves as a precursor for the official numbers due each week from the Energy Information Administration, or EIA, on crude, gasoline and distillate stockpiles.
Analysts tracked by Investing.com expect the EIA to report that crude inventories rose by 369,000 barrels last week versus the previous week’s decline of 1.05 million barrels.
{{ecl-485||Gasoline stocks} likely jumped by 1.62 million barrels last week, on top of the previous week’s rise of 2.12 million. Gasoline barrels have ballooned over the past month amid seasonally-weak U.S. demand that contrasted with the rally in oil.
Distillates inventories are expected to have fallen by 1.74 million barrels last week, adding to the previous week’s drop of 2.41 million.