Global crude benchmarks drifted south in March and early April as news of a possible Iranian nuclear deal began to filter down to trading floors.
An agreement between Iran and the P5+1 group (China, France, Russia, UK, US and Germany) is likely to see Iranian production sanctions lifted – potentially adding more volume to an already over-supplied market. Bearish sentiment was further compounded by reports of further builds to US crude inventories.
Market news was not entirely bearish. Data released by the Energy Information Administration (EIA) has indicated that US oil production has fallen, prompting some to suggest the US maybe approaching a peak. This will be welcomed news for the Organization of the Petroleum Exporting Countries (OPEC) members – which could support market share with additional barrels from Iran.