Oil futures on Monday continued to decline in Asian trade owing to Greece’s continued limbo and the uncertainty over the Iranian nuclear deal that was carried over from last week.
Sweet, light crude futures meant for delivery in august traded at US$ 51.93 per barrel on the New York Mercantile Exchange at 0339 GMT, dropping by US$ 0.81 in the Globex electronic session. The Brent crude on London’s ICE Futures exchange dropped US$ 1.04 to reach US$ 57.69 per barrel.
Oil prices have declined for two straight weeks, during which Brent crude has lost 7.2 per cent and Nymex oil futures have lost 11.6 per cent. The United States oil prices have witnessed a sharper decline owing to the pliability of shale oil production.
According to Baker Hughes Inc., the count of the US oil rig went up by five to reach 645 in the recent week, indicating the second consecutive week of a rise following 29 weeks of drop. It also added to the concerns that this would increase supply and weigh more on the prices of oil.
The count of drilling rig is a way of measuring the activity in the oil industry in the United States. Citigroup in its quarterly report said that the addition of rigs means that the shale industry could be preparing to come back to growth in the latter half of 2015 or even the beginning of 2016.
Time for the Iranian nuclear deal, on the other hand is running out as talks continue to get dragged on. The negotiations between Iran and six leading world powers have arrived at a make or break juncture. European officials warned that the diplomacy could possibly fail if by Monday night there is no final agreement. A European official said that there was no way the negotiations could go on if any kind of deal is not reached by Monday night.