Oil prices rebounded in Asia today after a sharp decline the day before, as traders try to get a handle on the full implications of Iran’s landmark nuclear deal with major powers.
US benchmark West Texas Intermediate for August delivery rose 39 cents to USD 51.80 a barrel in late morning trade after tumbling USD 1.63 in New York yesterday.
Brent crude for August advanced 45 cents to USD 57.50. The contract, which expires today, fell USD 1.65 the previous day.
“Oil prices are trading within range at the moment,” said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
He added that the market was “still trying to grasp” the impact of the Iranian nuclear deal that checks its nuclear programme in exchange for the lifting of economic sanctions, allowing Tehran to ramp up crude exports, which have been halved by the restrictions.
Analysts have said however that the return of Iranian oil to an already oversupplied global market will not be immediate and that the earliest would be by next year.
The strong dollar has also been keeping downward pressure on prices as oil is priced in the US currency, making the commodity more expensive, analysts said.
“It’s a confused market right now, that’s why we are seeing rangebound trading,” said Ang.