Oil Prices Fall Despite Stronger Economic Outlook
LONDON (Reuters) — Oil prices eased on Wednesday after earlier gains despite prospects for stronger global economic growth as talks to revive a nuclear deal with Iran opened the possibility of an easing of sanctions on its oil exports.
Brent crude futures lost 24 cents, or 0.4%, to $62.50 a barrel by 1348 GMT while U.S. West Texas Intermediate crude fell 33 cents, or 0.6%, to $59.
Prices were higher earlier in the session, buoyed by improving economic data.
"Optimism on the global economic outlook boosted sentiment in the crude oil market," analysts from ANZ bank said.
The International Monetary Fund on Tuesday said that unprecedented public spending to fight COVID-19 would push global growth to 6% this year, a rate not achieved since the 1970s.
However, a possible jump in U.S. fuel inventories and the Iran talks weighed.
U.S. crude stocks were down by 2.6 million barrels in the week ended April 2, while gasoline inventories rose by 4.6 million barrels and distillate stocks up by 2.8 million barrels, said three market sources, citing the American Petroleum Institute (API).
Official data is due to be released later Wednesday.
Iran and world powers held what they described as "constructive" talks on Tuesday and agreed to form working groups to discuss the possibility of reviving the 2015 nuclear deal that could lead to Washington lifting sanctions on Iran's energy sector and increasing oil supply.
"Iran is the single largest upside supply risk for the oil market," said Stephen Brennock of oil brokerage PVM.
Oil prices dropped earlier this week after the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, agreed to gradually ease oil output cuts from May.
But analysts said the size of the increase was unlikely to have a major impact on market rebalancing.
"The OPEC+ decision ... is not expected to jeopardize the oil rebalancing and hence the elevated price backdrop," Brennock said.
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