Brent crude futures slipped 3 cents, or 0.04%, to $67.39 a barrel at 0139 GMT, while U.S. West Texas Intermediate (WTI) crude fell 5 cents, or 0.08%, to $62.28. Both benchmarks were hovering near two-week lows.
A fall in crude prices is a negative development for upstream oil and gas companies (producers like ONGC, Oil India). Lower prices directly reduce their revenue per barrel, tighten profit margins, and can lead to reduced capital expenditure on exploration. Conversely, low oil prices are beneficial for downstream companies (refiners/marketers).
Iran and the United States reached an understanding on key “guiding principles” during talks on Tuesday aimed at resolving their long-running nuclear dispute, Iranian Foreign Minister Abbas Araqchi said, while cautioning that a final agreement is not imminent.
Despite the development, analysts remain sceptical about the chances of a breakthrough. Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet, said crude oil prices appear poised for a technical rebound, but added that a finalised agreement remains distant and markets are wary about the durability of diplomatic progress, Reuters reported.
Meanwhile, political consultancy Eurasia Group said in a note to clients on Tuesday that it sees a 65% probability of U.S. military strikes against Iran by the end of April.
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Also weighing on oil prices were reports from Russian media that output at the Tengiz oil field in Kazakhstan, one of the world’s largest, was rising after a suspension in January. Tengiz plans to reach full capacity by February 23, a Reuters report stated.
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