(Bloomberg) – Oil fell to close at $ 91 a barrel. barrel, which put a stop to a rally that has driven crude oil to its highest level since 2014.
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Futures in New York fell 1.1% on Monday after rising for seven weeks in a row and rising nearly 30%. Diplomats are set to return to Vienna on Tuesday to resume Iran’s nuclear talks, which are seen as a way to restore the nation’s sanctioned oil to global markets. On Friday, the United States signed several exemptions related to Iran’s civilian nuclear activities to facilitate diplomatic efforts.
The potential for any Iranian barrels where crude oil is overbought from last week’s rally will cause the market to take a “break to refresh,” said Rob Haworth, senior investment strategist at US Bank Wealth Management. Raw futures “had a really good run at a time when the broader economy is not doing that way.”
Meanwhile, the second-largest U.S. refinery was unexpectedly closed along with other factories on the Gulf Coast, sending spot gasoline prices in Houston to its highest in two months. The closures may have an overall impact on a market that is already under pressure for supplies. Fuel oil margins rose to their strongest since April 2020.
Although crude oil has started the week on the back, the structure of the oil market has indicated one of the strongest supply and demand balances for years. It has come as the average price of gasoline in the United States rose to the highest level in more than seven years and requires $ 100 per gallon. barrel of some of Wall Street’s biggest names, getting taller.
See also: Gasoline prices are not falling anytime soon: Julian Lee
“I would expect prices to stay where they are, but there is definitely a risk of the upside,” said Fiona Boal, head of commodities and real assets at S&P Dow Jones Indices. “Demand has been incredibly tight. I have been surprised – especially in the United States – by the demand for distillate. “
Over the weekend, Saudi Arabia raised oil prices for its customers in Asia, the United States and Europe. The 60-cent increase to its main Arab Light degree to Asia was broadly in line with retailers’ expectations.
OPEC + agreed last week to increase production by 400,000 barrels a day in March, but the group is struggling to meet its supply promises. One of Libya’s largest oil companies was recently forced to cut production due to lack of storage capacity caused by inability to perform maintenance on tanks.
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