Global Oil Price Drops as Iran Nuke Talk Comes to an End

TEMPO.CO, Jakarta - Global crude price experiences a decrease as Iran and the P5+1 member countries (China, United States, United Kingdom, Russia, France, and Germany) expect to reach an agreement on Tehran's nuclear program soon. The agreement is expected to lift economic sanctions against Iran as both sides continue to attempt to address differences and close existing gaps as the agreement deadline comes to a close this Tuesday, March 31, 2015.

Price for the Brent Crude decreases by US$0.41 to a level of US$56 per barrel after a five percent drop last Friday following speculations related to the nuclear agreement. Meanwhile, the West Texas Intermediate (WTI) experienced a decrease by US$0.77 to a level of US$48 per barrel.

An analyst from ANZ Bank, as quoted by Reuters, stated that Iran may have the chance to resume its oil export as a result of the relaxation of the economic sanction, which will resulted in increase global oil supply and decreasing prices.

Energy consulting company, Wood Mackenzie, analyzed that attempts made by OPEC member countries to reduce production capacity seem hard to achieve because Saudi Arabia remains in constant rejection of the plan.

A futures broker company, Phillip Futures, predicted that global oil price would experience major drop on the second quarter of 2015, which will start on April. The condition will be made worse due to the increasing oil production capacity of the United States and Libya, and the weakening of the economy of Asian countries. The company predicted that Brent Crude price will reach US$50 to US$53 per barrel while the WTI will reach US$46 to US$48 per barrel.

Meanwhile in Indonesia, I Gusti Nyoman Wraatmadja, acting Director General of Oil and Gas at the Energy and Mineral Resources Ministry, predicted that global oil price will be stable until the end of 2015. In the future, Nyoman said that the highest level for global oil price will reach US$70 to US$74 per barrel.

REUTERS | ADUTYA BUDIMAN