Oil prices climb as Iran nuclear talks drag, summer demand aids

imageCommodities16 minutes ago (Jun 21, 2021 09:45)

© Reuters. FILE PHOTO: Pipelines run down the deck of Hin Leong’s Pu Tuo San VLCC supertanker in the waters off Jurong Island in Singapore July 11, 2019. Picture taken July 11, 2019. REUTERS/Edgar Su/File Photo

By Noah Browning

LONDON (Reuters) -Oil prices edged higher on Monday, underpinned by strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could lead to a resumption of crude supplies from the OPEC producer.

Brent crude for August gained 23 cents, or 0.3%, to $73.74 a barrel by 0825 GMT. U.S. West Texas Intermediate (WTI) crude for July was up 29 cents, or 0.4%, at $71.93 a barrel.

Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel. The rebound has pushed up spot premiums for crude in Asia and Europe to multi-month highs.

“Oil’s underlying physical demand picture remains positive,” said OANDA analyst Jeffrey Halley. “Despite the noise in financial markets, the real world is on the right track and will require increasing amounts of energy as it reopens.”

Negotiations to revive the Iran nuclear deal took a pause on Sunday after hardline judge Ebrahim Raisi won the country’s presidential election. Two diplomats said they expected a break of about 10 days.

Iranian and Western officials say Raisi’s rise is unlikely to alter Iran’s negotiating position.

A deal could lead to Iran exporting an extra 1 million barrels per day, or 1% of global supply, for more than six months from its storage facilities.

Oil prices are also drawing support from forecasts of limited growth in U.S. oil output, giving the Organization of the Petroleum Exporting Countries (OPEC) more power to manage the market in the short term before a potentially strong rise in shale oil output in 2022.

However, the U.S. rig count, an early indicator of future oil output, rose by eight last week to 373, its highest since April 2020, data from energy services firm Baker Hughes Co showed. [RIG/U]

Oil prices firm on summer demand as Iran talks drag

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Please enter your comment!
Please enter your name here