Oil prices post slight gain as traders watch Iran nuclear talks

Oil futures posted a modest gain on Tuesday, with US prices holding their highest level in about a week, as traders kept tabs on developments in negotiations to revive the Iran nuclear deal .

Prices “remain at high levels as the peak oil demand season approaches and restrictions are lifted across much of Europe and the United States,” said Louise Dickson, oil markets analyst at Rystad Energy, in a market update.

The oil market has “factored in the last bits of pessimism from traders, coming from the prospect of a nuclear deal with Iran, which will allow the sanctions-hit country to export more oil, adding to the supply. global, ”she said.

“However, the bearish fumes of the prospect of a nuclear deal with Iran may have run their course, as the reality of an additional million bpd or more has gradually been taken into account since officials Diplomatic began to meet in Vienna this year, ”Dickson said.

Crude West Texas Intermediate for delivery in July CL00,

rose 2 cents, or 0.03%, to $ 66.07 a barrel on the New York Mercantile Exchange. First-month contract prices rose for a third straight session and ended at their highest since May 17, according to Dow Jones Market Data.

First month of July Brent BRNN21,
tacked on 19 cents, or 0.3%, at $ 68.65 a barrel on ICE Futures Europe. Brent August Brent BRN00,

the most actively traded contract, added 12 cents, or 0.2%, to $ 68.49 a barrel.

Crude ended sharply higher on Monday as doubts emerged over the timing of any deal that would see the United States revert to the nuclear deal and lift sanctions on Iran, which would allow the country’s crude exports to come back to the market. US Secretary of State Antony Blinken said on Sunday that the United States has yet to see whether Iran is “ready and willing to make the decision to do what it needs to do” for the sanctions to be lifted. .

Iran agreed this weekend to extend a deal allowing the International Atomic Energy Agency to monitor its nuclear program for an additional month, but the window of opportunity for a deal ahead of Iran’s presidential elections in June seems too small, said Eugen Weinberg, analyst at Commerzbank. , in a note.

Despite Tuesday’s softer tone in the crude oil market, bullish analysts said the market is likely to take a comeback in Iranian barrels in the wake and continue to cut production cuts by the Organization of the Exporting Countries. of oil and its allies, known together as OPEC +. The group of producers will hold their next one on June 1st.

A possible deal with Iran is seen “as a global risk rather than an overhaul of physical balances,” said Michael Tran, analyst at RBC Capital Markets.

Between the deal with Iran and the OPEC + reduction schedule, “the two politically motivated bearish hurdles are being lifted, and the market may return to focusing on oil demand,” the cycle ahead and more quantifiable factors that can be modeled, ”he said.

Back to Nymex, the June contract for RBM21 gasoline,
slightly decreased by 0.02% to $ 2.12 per gallon and June HOM21 fuel oil
threw 0.3% to nearly $ 2.04 a gallon.

June NGM21 natural gas,
+ 0.79%,
which expires at the end of Wednesday’s session, stands at $ 2.91 per million British thermal units, up 0.9%.

The U.S. Energy Information Administration will release its oil supply data on Wednesday, covering the week ending May 21. On average, analysts polled by S&P Global Platts predict a drop of 2.2 million barrels of US crude inventories, as well as a drop in supply of 700,000 barrels of gasoline and 1.6 million barrels of distillates .

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