Abu Dhabi: Oil prices increased slightly for the first time in four days due to a delay in the Iranian negotiations over the lifting of its sanctions and less than expected weekly build-up in US inventories.
Brent, the international benchmark for crude oil, was trading around $57 at 9pm yesterday after being steady the for most part of the day at $55.
West Texas Intermediate, the US oil marker went up by 4.2 per cent to $49.66 a barrel. The negotiations dragged on with no official statement coming from any of the parties involved in the negotiations in Lausanne, Switzerland.
Analysts predicted that oil prices are likely to drop by one or two dollars if a deal is reached between Iran and P5+1 countries.
“We don’t anticipate a significant drop in oil prices if Iran reaches an agreement with six major world powers. The price might drop by a dollar or two but will add pressure on the oil prices which have been going down due to oversupply and weak demand,” said Virendra Chauhan, an analyst from Energy Aspects, London.
Current production
He said the current Iran oil production is 2.8 million barrels per day and might go up to 3.5 millions barrels per day by the end of this year. “Iran needs a lot of investment to ramp up production and it may take some time. British Petroleum today said that it will take at least three years for Iran to reach its full capacity.”
Brent fell more than 2 per cent on Tuesday in anticipation of a deal between Iran and six major world powers.
The discussions which should have concluded on Tuesday were extended by a day after negotiators achieved a breakthrough and closed in on a deal to pave way for the easing of sanctions.
Iran, an important member of the Organisation of Petroleum Exporting Countries, produces about 2.8 million barrels of oil per day and has the world’s fourth largest proven reserves.
