Commodities

Oil steady near week-high as prospect of Iran supply glut wanes

Reuters Tokyo | Updated on May 25, 2021

Indirect negotiations between US and Iran due to resume in Vienna this week

Oil prices were steady on Tuesday, holding around one-week highs after jumping more than 3 per cent the previous session as prospects of an early return of oil exporter Iran to international crude markets lessoned.

Brent crude futures were down 6 cents at $68.40 a barrel by 0039 GMT, having jumped 3 per cent on Monday. US West Texas Intermediate futures fell 8 cents to $65.97 a barrel, after gaining 3.9 per cent the previous session.

Indirect negotiations between the US and Iran are due to resume in Vienna this week. Talks were given another life after Tehran and the UN nuclear agency extended a monitoring agreement on the Middle Eastern country’s atomic programme.

Oil edges lower as Covid-19 restrictions in Asia fuel demand concerns

Worries that Iran was soon going to start selling oil if an agreement resulted in the lifting of UN and other sanctions on crude exports had pulled down prices earlier but talks have not been conclusive.

Covid impact

“US Secretary of State Blinken poured cold water over the prospect of a revival, stating that there was no indication that Iran is willing to comply with nuclear commitments,” Sophie Griffiths, Market Analyst at OANDA, said in a client note.

Still, the global recovery from the Covid-19 pandemic is patchy, indicating a continued mixed outlook for oil demand.

Crude oil outlook turns positive

Parts of Europe and the US are recording fewer infections and deaths, prompting governments to ease restrictions, but in other areas such as India — the world’s third-biggest oil importer — rates are still high.

New coronavirus infections in India rose by 222,315, government data showed on Monday, the world’s biggest 24-hour increase, though numbers have fallen off highs of over 400,000 earlier this month.

Published on May 25, 2021

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