WTI price tumbles to around $61.20 in Friday’s early Asian session.
Trump said the US was getting close to securing a nuclear deal with Iran.
Oil inventories climbed by 3.454 million barrels in the week ended May 9, according to the EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $61.20 during the Asian trading hours on Friday. The WTI price edges lower on expectations that the United States (US) and Iran may soon reach a deal over Tehran’s nuclear program.
A top adviser to Iran’s supreme leader stated on Wednesday that Iran is ready to sign a nuclear deal with certain conditions with US President Donald Trump in exchange for lifting economic sanctions. On Thursday, Trump said that the US was getting close to securing a nuclear deal with Iran, and Tehran had "sort of" agreed to the terms. The developments of a possible nuclear deal could weigh on the WTI price.
"(Any) immediate sanctions relief stemming from a nuclear agreement could unlock an additional 0.8 million barrels per day of Iranian crude for the global market – an undeniably bearish development for prices," said SEB analyst Ole Hvalbye.
A surprise rise in US crude oil inventories last week has prompted investor concerns of excess supplies, which contributes to the WTI’s downside. The US Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the US for the week ending May 9 climbed by 3.454 million barrels, compared to a fall of 2.032 million barrels in the previous week. The market consensus estimated that stocks would drop by 1.0 million barrels.
On the other hand, the weaker Greenback might cap the downside for the USD-denominated commodity price. Another soft inflation print suggested that companies are absorbing some of the hit from higher tariffs. The US Producer Price Index (PPI) rose 2.4% YoY in April, following the 2.7% increase in March, according to the Bureau of Labor Statistics on Thursday. This figure came in below the market expectation of 2.5%.
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