Oil Steady over Iran Nuke Talks
Oil prices were stable on Wednesday as concerns about a possible resumption of Iranian supply would create congestion, which were offset by hopes of stronger US fuel demand following a decline in weekly inventory estimates by the American Petroleum Institute.
July Brent crude oil futures rose 5 cents, or 0.1%, to $ 68.70 a barrel by 0102 GMT, while US West Texas Intermediate (WTI) crude oil was $ 66.05 a barrel for July, which corresponds to a decrease of 2 cents.
Both benchmarks rose on Tuesday and hit their highest levels in a week. They were hoping for increased demand due to the upcoming summer driving season in the northern hemisphere and the lifting of coronavirus restrictions.
U.S. crude oil and fuel inventories fell last week, according to two market sources, with API numbers citing Tuesday.
Crude oil inventories declined 439,000 barrels for the week ending May 21. Gasoline inventories fell 2 million barrels and distillate inventories fell 5.1 million barrels, the data showed.
“The API data was good, but investors paid more attention to the Iran talks as the impact of a possible return of Iranian oil to the market is more significant,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.
Indirect negotiations between the United States and Iran resumed this week in Vienna after Tehran and the UN Nuclear Agency extended a surveillance agreement on the country’s nuclear program in the Middle East.
Iran and the world powers have been negotiating in Vienna since April to work out steps that Tehran and Washington must take against sanctions and nuclear activities in order to fully comply with the 2015 Iranian nuclear pact with the world powers again.
According to analysts, Iran could provide around 1 to 2 million barrels per day (bpd) of additional oil supplies if a deal is signed and sanctions lifted.