Brent oil bounced back from a three-month low to around $57 a barrel on Wednesday after an industry report showed a larger-than-forecast drop in U.S. crude stocks and Iran nuclear talks failed to produce a deal.
Oil had come under downward pressure as a plunge in China’s stock market accelerated and the Greek debt crisis raised concern about fuel demand.
Talks in Vienna between Iran and six world powers dragged on beyond a self-imposed deadline as officials on both sides talked of important differences preventing a deal to lift sanctions and so allow more Iranian oil onto world markets.
“Those market participants who have been betting on a rapid Iranian return to the oil market are now likely to square their positions, which should lend short-term support to prices,” said Carsten Fritsch, senior oil analyst at Commerzbank.
Brent crude LCOc1 was up 50 cents at $57.35 a barrel by 1010 GMT (6:10 a.m. EDT), having earlier dipped as low as $55.87. On Tuesday, Brent fell to $55.10, its weakest since April 6.
About Alfonso Esparza
Senior Currency Strategist, OANDA, Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto. Follow on Twitterand on his Google+ profile.