Oil prices dropped thrice in the last four days following Iran’s assurance on resuming talks over its contentious nuclear program , the release of economic data in the U.S and raising concerns in China over fuel demand.
Talks involving international parties over the nuclear program are set to resume this week with the Iran government . Also the inflation in China has been rising at a pace faster than expected which has made the government’s margin in boosting the economy. While in the U.S the employment data showed only a 120,000 jobs being added foe the month of March which is lowest in five months . Futures in the wake of such reports have slid by nearly 1.4 % after seeing a rise of 1.8 % on 5th of April .
With the numbers in the payroll data dropping significantly the economy is expected to take a downward trend which might generate downside risks in the oil market and for fuel demand.
Oil for the delivery in May , fell down by $1.44 to $101.87 per barrel on New York Mercantile Exchange during electronic trading while the prices for Brent crude on London’s ICE Future Europe Exchange for settlements in May declined almost 0.9 % to reach $122.36 . The premium for European benchmark against the U.S futures drew to $20.34 , with exchanges remaining closed in U.S and U.K on account of holidays.
Iran will meet the permanent members of the UN Security Council and Germany for talks over the nuclear issue on April 14 . The government in Iran is under immense amount of pressure from sanctions in finance , trade and energy not to mention the U.S penalizing the banks that are processing the Iranian crude payments . While Mahmoud Ahmadinejad has said that Iran’s nuclear program will continue even if the whole world opposes , strategists believe that keeping the price of oil high is going to be their strategy and that the talks are nothing but a non-issue . Oil prices will reach as high as $125 by the second half while Brent crude could see a price of $135 per barrel in case the sanctions on Iran are implemented and the petro reserves in hold of developed economies aren’t released.
According to the reports of the Commodity and futures Trading Commission the bets were reduced the most in almost three months taking a turn away from the bullish trends after the U.S outputs boosted the stockpiles after growing at highest levels after 1999 . Money traders slashed by ten percent within 7 days , their long positions or the wagers on soaring prices which according to the reports is the maximum drop after December last year .