Oil prices slipped for a third session on Wednesday on profit taking due to concerns of a possible rise in supplies from Iran despite industry data showing a surprised drop in US oil inventories.
Brent crude futures edged down 8 cents, or 0.1%, to $90.70 a barrel by 08:25 GMT, while US West Texas Intermediate crude was at $89.18 a barrel, down 18 cents, or 0.2%.
The contracts slid about 2% on Tuesday as Washington resumed indirect talks with Iran to revive a nuclear deal. Such a deal could lift US sanctions on Iranian oil and quickly add supplies to the market, although a number of vital issues still need to be ironed out.
“With the negotiations ongoing, the oil price is likely to lose steam in the next week, despite the bump higher we’ve seen today,” said CMC Markets’ analyst Tina Teng, adding that there has also been some profit taking among investors who have turned cautious after prices hit more than seven-year highs.
OCBC economist Howie Lee said investors might view the Iran nuclear talks as an opportunity to take some profit but doubt the downward price decline would be severe as fundamentals are still very tight.
“US going to Iran to reopen sanctions waiver talks shows … how tight the market is,” he added.Governments from the United States to Japan are looking at ways to tackle high oil prices as inflation soars.
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