On Wednesday crude-oil futures were choppy in Asia as markets were eyeing U.S.-Iran nuclear talks and the build-up in U.S. oil supplies.
Analysts consider the April-June quarter to be the weakest for the oil.
On the New York Mercantile Exchange, light, sweet crude futures for
delivery in May traded at $47.40 a barrel, down $0.20 in the Globex
electronic session.
On London’s ICE Futures exchange May Brent crude fell $0.15 to $54.96 a barrel.
Nymex crude lost 10.6% in the January-March quarter, and has fallen by 55% over the last three quarters, while Brent crude lost 3.9% in the last quarter and has fallen by 51% over the last three quarters. So far, oil prices have fallen for three consecutive quarters.
According to Barclays analyst Michael Cohen, the April-June quarter will be the weakest part of this year for oil prices, after which the market will slowly rebound. Geopolitical turmoil in the Middle East is poised to boost oil prices but weak demand-supply fundamentals will eventually win out.
Late Tuesday, the American Petroleum Institute, an industry group, said its data showed U.S. crude inventories rose by 5.2 million barrels last week. The U.S. Energy Information Administration is expected to publish its inventory numbers on Wednesday and analysts expect a stockpile increase of 4.6 million barrels.
In the meantime, nuclear talks between Iran and six world powers missed its deadline on Tuesday, but officials have agreed to continue talks in Switzerland for an extra day.
Some signs of progress in negotiations were seen in the early morning hours of Wednesday, with Russian Foreign Minister Sergei Lavrov saying the sides reached agreement in principle on a framework outlining elements of a final nuclear deal to be reached by June 30.
A successful nuclear deal could give way for the lifting of sanctions against Iran, and release a large amount of stockpiled oil into an oversupplied global market, pressuring oil prices.
Oil markets also did not take into consideration a marginal improvement in Chinese manufacturing numbers. China’s official Purchasing Managers Index rose to 50.1 in March from 49.9 in February - data released earlier Wednesday. The HSBC China manufacturing PMI fell to a final reading of 49.6 in March from 50.7 in February.
