Brent Oil back above 111 after ‘Knee Jerk’ Reaction

Iran’s pledge to restrict nuclear work in return for loosened economic sanctions may have a limited effect on crude prices, said analysts who called today’s 2.7 percent slump in Brent a “knee-jerk” reaction.

Oil exports from the Islamic republic will be held to about 1 million barrels a day under sanctions that remain in force after Iran and six world powers reached an agreement yesterday in Geneva, according to the White House. Brent crude prices slumped today in the first day of trading since the deal while West Texas Intermediate also fell in New York.

“The move lower in prices is an expected reaction, especially considering the recent strength in prices,” said Mark Keenan, head of commodities research for Asia at Societe Generale SA in Singapore. “But to see a more significant move lower in prices, the market will likely require a little more evidence that this initial resolution goes through.”

Bloomberg

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