Oil eases as investors await Iran nuclear talks this week

Oil pulled back after hitting fresh multi-year highs on Monday, as investors awaited the outcome of this week’s talks between Iran and world powers over a nuclear deal that is expected to boost crude supplies.

Brent crude futures for August fell 26 cents, or 0.4 per cent, to $71.63 a barrel by 0218 GMT, after earlier hitting $72.27, their highest since May 2019. U.S. West Texas Intermediate crude for July touched $70 for the first time since October 2018 but retreated to $69.43 a barrel, down 19 cents, or 0.3 per cent.

Investors may have sold off some contracts to take profit when WTI hit $70, said Avtar Sandu, a senior commodities manager at Phillips Futures in Singapore.

“The primary concern is about Iranian barrels coming back into the market but I don’t think there will be a deal before the Iranian presidential election,” he added.

Global oil demand is expected to exceed supplies in the second half despite a gradual easing of supply cuts by OPEC+ producers, analysts say.

A slowdown in talks between Iran and global powers in reviving a 2015 nuclear deal and a drop in U.S. rig count also supported oil prices.

Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports. read more

In the United States, the number of oil and natural gas rigs operating fell for the first time in six weeks as growth in drilling slowed.