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Crude edges lower following Iranian nuclear deal

by ChemOrbis Editorial Team -
  • 03/04/2015 (11:13)
According to media reports, Iran and the P5+1 powers (the US, France, Russia, China, the UK and Germany) reached a tentative deal in Lausanne, Switzerland on Thursday regarding Iran’s nuclear program. The final agreement reportedly will be signed by June 30, 2015 and sanctions against Iran will be lifted once the country has demonstrated compliance with the deal to ensure that its nuclear facilities can only be used for civilian purposes.

The deal envisions a gradual lifting of sanctions against Iran as the country demonstrates ongoing adherence to the deal, with US Secretary of State John Kerry commenting that sanctions relief would likely follow around 6 months to one year after the deal. American sources also commented that sanctions could be “snapped back” into place if Iran fails to abide by the terms of the agreement.

Brent crude oil futures sank $2.15 to settle at $54.95/barrel yesterday following the news while NYMEX crude posted a smaller reduction of $0.95 to settle at $49.14/barrel on April 2.

Some market players commented that lifting sanctions against Iran would see additional crude supplies entering the market, which may put downward pressure on prices. According to one report, crude contracts may retreat around $5/barrel following an Iranian deal. In addition, the lifting of sanctions may bring more Iranian petrochemical imports into Europe.
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