Oil turns higher on fears of tight supply, shrugging off U.S.-Iran talks

Tokyo, Feb. 7 (BNA): Oil prices rose on Monday, reversing previous losses, as investors maintained bullish sentiment amid expectations that global supply will remain tight as demand rebounds and ignore signs of progress in nuclear talks between the United States and Iran.

“Investors took short-term profits on the news of progress in the US-Iran nuclear talks, but fresh buying started again after technical corrections as global supply is expected to remain tight,” said Tatsufumi Okoshi, chief economist at Nomura. Guarantees.

US President Joe Biden’s administration on Friday reinstated sanctions waivers granted to Iran to allow international nuclear cooperation projects, as talks on the 2015 international nuclear deal enter the final stage, according to Reuters.

If the United States lifts sanctions on Iran, the country could boost oil shipments, increasing global supplies.

Brent crude rose 60 cents, or 0.6 percent, to $93.87 a barrel at 01:52 GMT, after earlier touching its highest level since October 3, 2014, at $94.00. It fell to $92.47 in early trading.

US West Texas Intermediate crude rose 25 cents, or 0.3%, to $92.56 a barrel, close to a 7-year high hit on Friday, after falling to $91.36 earlier in the session.

Both benchmarks rose more than $2 on Friday, extending their rally to the seventh week on ongoing concerns about supply disruptions fueled by political turmoil among the world’s top producers.

“Investors are expecting more twists and turns in the US-Iran talks, and no agreement will be reached any time soon,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co., Ltd.

He said, “The tone of the market remained upbeat, with investment bankers expecting Brent crude to reach $100 per barrel and global supplies to remain tight with OPEC+ not reaching its production targets and the US not increasing production much.”

Analysts said that crude oil prices, which have already risen about 20% this year, are likely to exceed $100 a barrel due to strong global demand.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known together as OPEC+, are struggling to meet the goals despite pressure from major consumers to ramp up production more quickly.

Also in the United States, despite the rise in the number of rigs for 18 months in a row, oil production is still far from the record levels that prevailed before the pandemic.

Raising supply concerns, tensions remain high in Eastern Europe, where White House National Security Adviser Jake Sullivan said on Sunday that Russia could invade Ukraine within days or weeks, but could still choose a diplomatic path.

HF