Oil rises as threat of immediate Iran supply recedes
Oil prices rose on Tuesday, with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks dragging on over the United States rejoining a nuclear agreement with Tehran.
Brent crude was up by 43 cents, or 0.6%, at $73.29 a barrel
by 0134 GMT, having risen 0.2% on Monday. U.S. oil gained 41 cents, or 0.6%, to
$71.29 a barrel, having slipped 3 cents in the previous session.
Indirect discussions between the United States and Iran,
along with other parties to the 2015 deal on Tehran’s nuclear programme,
resumed on Saturday in Vienna and were described as “intense” by the European
Union.
A U.S. return to the deal would pave the way for the lifting
of sanctions on Iran that would allow the OPEC member to resume exports of
crude.
It is “looking increasingly unlikely that we will see the
U.S. rejoin the Iranian nuclear deal before the Iranian Presidential Elections
later this week,” ING Economics said in a note.
Other members of the Organization of Petroleum Exporting
Countries (OPEC) along with major producers including Russia – a group known as
OPEC+ – have been withholding output to support prices amid the pandemic.
“Additional supply from OPEC+ will be needed over the second
half of this year, with demand expected to continue its recovery,” ING said.
To meet rising demand, U.S. drillers are also increasing
output.
U.S. crude production from seven major shale formations is
forecast to rise by about 38,000 barrels per day (bpd) in July to around 7.8
million bpd, the highest since November, the U.S. Energy Information
Administration said in its monthly outlook.
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