Oil rises as threat recedes of Iran supply resuming soon

Some members of the OPEC+ have been withholding output to support prices amid the pandemic. (Shutterstock)

• Indirect discussions between the US and Iran resumed on Saturday in Vienna and were described as “intense” by the EU

TOKYO: 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 17 cents, or 0.2 percent, at $73.03 a barrel by 0347 GMT, having risen 0.2 percent on Monday. US oil gained 15 cents, or 0.2 percent, to $71.03 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 program, resumed on Saturday in Vienna and were described as “intense” by the European Union.
A US 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 US 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.
Still, prices were off their highs earlier in the day with US crude briefly tripping into negative territory.
“Daily technical indicators are currently pointing to crude oil in overbought territory and a pullback may be due,” said Avtar Sandu, senior manager commodities at Phillip Futures.
Investors and traders are also watching the outcome of the US Federal Reserve meeting that starts later on Tuesday for signals on when it will scale back monetary stimulus, he said.
The Fed is getting ready to starting debating how and when to start tapering a massive asset-purchase program that helped helped support the US economy during the pandemic.