Benchmark Brent crude prices may target $105 a barrel this week after Iran and major western powers struck an initial agreement on Sunday aimed at limiting Tehran's nuclear program in return for sanctions relief, CNBC's latest market survey of traders, analysts and strategists showed.
Although many believe Monday's initial Brent's drop of more than $2 a barrel may extend further, lingering supply risks in Iraq, Libya and Nigeria will prevent prices falling too steeply. Moreover, Sunday's deal doesn't guarantee the complete dismantling of oil sanctions and the immediate return of Iranian crude.
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The Iran agreement will cause only "modest" price weakness taking Brent crude to $105 a barrel in the near-term and possibly to as low as $100, said UBS' Global Commodities Analyst Daniel Morgan. "The key risks we see are now unrests in both Iraq and Libya which could see prices better supported," Morgan added.