By Myra P. Saefong and William Watts

SAN FRANCISCO
EnergiesNet.com 02 15 2022

Oil futures ended lower Thursday, pressured by signs of progress toward restoring a nuclear agreement with Iran that may bring more oil to the world market.

Some support for prices remained, however, as traders continued to weigh the potential for a Russian invasion of Ukraine, which may lead to disruptions in global energy supplies.

Price action

• West Texas Intermediate crude for March delivery CL.1, -0.11% CL00, +0.57% CLH22, -0.11% fell $1.90, or 2%, to settle at $91.76 a barrel on the New York Mercantile Exchange.
  
• April Brent crude BRN00, +0.07% BRNJ22, +0.07% lost $1.84, or 1.9%, at $92.97 a barrel on ICE Futures Europe. Both WTI and Brent ended Monday at their highest since September 2014.
  
• March natural-gas futures NGH22, -0.85% fell 4.9% to $4.486 per million British thermal units after posting a gain of 9.5% Wednesday.
  
• March gasoline RBH22, +1.15% fell 1.1% to $2.649 a gallon, while March heating oil HOH22, +0.45% lost 2.5% at $2.786 a gallon.

Oil futures temporarily trimmed a decline after the U.S. envoy to the United Nations was quoted as saying that there was evidence on the ground that Russia was preparing for an “imminent invasion” of Ukraine.

Read: Here’s the technology being used to watch Russian troops as Ukraine invasion fears linger

Market drivers

Russia earlier this week said it was withdrawing troops from near the Ukraine border. But NATO and U.S. officials said that Russia instead increased its forces near Ukraine by 7,000 troops.

Oil fell late Wednesday after Reuters reported that Iran’s top nuclear negotiator, Ali Bagheri Kani tweeted that after weeks of intensive talks “we are closer than ever to an agreement.” If the 2015 agreement with Iran is revived and economic sanctions are lifted, Iran may resume oil exports.

The oil market is obviously extremely tight and prices “could already be in triple-figure territory if not for the nuclear talks between the U.S. and Iran,” said Craig Erlam, senior market analyst at OANDA, in a market update.

In a Thursday research note, analysts at RBC Capital Markets reiterated their view that if a new agreement is reached, Iran’s exports would likely climb by 500,000 barrels in six months, and by 1 million barrels in 12 months.

Meanwhile, uncertainty around Ukraine and the potential for supply disruptions from Russia have served to build on the premium for nearby Brent crude futures, noted Carsten Fritsch, commodity analyst at Commerzbank, with the spread between the front month and the contract due in 12 months widening to more than $12.

“Market participants are willing in other words to pay record-high premiums for oil deliverable at short notice because they continue to expect delivery outages,” he said.

Natural-gas prices, meanwhile, declined after Wednesday’s rally. The Energy Information Administration reported Thursday that U.S. supplies of the fuel fell 190 billion cubic feet last week.

marketwatch 02 17 2022