Oil closes down, after volatile session and with news about supply on the radar

Oil futures contracts closed lower on Tuesday (9). The commodity recorded volatile session, alternating between gains and losses, as investors monitored news about supply in this market.

WTI crude for September closed down 0.29% (-$0.26) at $90.50 a barrel on the New York Mercantile Exchange (Nymex), and Brent for October was down 0.35% (-US$0.34) at US$96.31 a barrel on the Intercontinental Exchange (ICE).

Contracts receded earlier in the day, with the possibility that Iran would resume the multilateral agreement to control its nuclear program and, consequently, be able to export more oil.

The European Union has presented a final text to revive the 2015 agreement, but it is not yet clear whether there can be agreement with Tehran. Earlier this week, negotiators in Iran were optimistic about the outlook.

Further along, the market signal reversed, supported by news that a Ukrainian company stopped supplying Russian oil via a pipeline to Hungary, the Czech Republic and Slovakia on Aug. of Russian transport.

The oil boost, however, did not hold, with doubts about demand also on the radar, amid discussions among analysts about the risk of a global recession.

Oxford Economics cut China’s GDP growth forecast this year from 4.0% to 3.2%. The Asian power is an important global buyer of the oil.

TD Securities says the Iran trade is a “significant” challenge to oil earnings. The investment bank considers that a potential deal would be an important change in the market, with the highest supply. With this, he believes that contracts will continue to fluctuate in the current range, awaiting more concrete news about negotiations with Iran.

Danske Bank, for its part, says the question is whether the US and EU are ready to accept a deal that could mean the return of Iranian exports to the global market. The bank considers that a decision on this matter could come within “weeks”.