Lower In Asia; Iran Nuclear Deal Eyed

WTI and Brent are ~$0.90 worse off apiece, consolidating after a pullback from their respective one-week highs made on Friday, with both contracts on track to snap a three-day streak of higher daily closes amidst optimism re: a return of Iranian crude to global supplies.

• To elaborate, unconfirmed, leaked reports by Iran International pointed to potential U.S. concessions to Iran, including measures on sticking points such as U.S. sanctions against the IRGC.
• Al Jazeera sources on Friday also placed a U.S.-Iran nuclear deal as “imminent”, with plans to allow Iran to export crude “within 120 days of signing the agreement”.
• Crude also faces limited headwinds on economic growth worry amidst power rationing in China’s Sichuan province (19 of 21 cities were ordered to halt industrial production for six days last week), although the power cuts are currently much less extensive than those witnessed in ‘21.
• Due to Sichuan’s unique reliance on hydroelectricity (~80% of the grid), the shortage is expected to remain limited, barring the impact of drawdowns on energy supplies from surrounding provinces.
• RTRS sources have said that the Caspian Pipeline Consortium (CPC) has suspended some oil loadings at a Black Sea terminal, although the impact on overall loadings is reportedly limited owing to lowered output due to ongoing maintenance at major Kazakh oil fields (since early-Aug).