Oil prices hovered below an almost seven-month high on Tuesday as traders gauged the outlook for US-Iran nuclear talks amid heightened Middle East tensions, while also weighing uncertainty around US trade policy.
Brent crude futures eased 9 cents, or 0.1 per cent, to $71.40 a barrel by 0120 GMT, following a volatile session on Monday that saw it hit the highest level since July 31 at $72.50 while swinging between gains and losses of more than 1 per cent.
US crude futures were down 11 cents, or 0.2 per cent, at $66.20 a barrel. That’s after rising to $67.28 in the previous session, the highest since August 4.
“Crude oil markets remained on edge as US-Iran talks resume this week,” Daniel Hynes, an analyst at ANZ, said in a research report.
“Renewed trade tensions also weighed on sentiment.”
Iran and the US will hold a third round of nuclear talks on Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi said on Sunday.
The United States wants Iran to give up its nuclear programme, but Iran has adamantly refused, and denied it is trying to develop an atomic weapon.
The State Department is pulling out non-essential government personnel and their families from the US embassy in Beirut, a senior State Department official said on Monday, amid growing concerns about the risk of a military conflict with Iran.
US President Donald Trump said in a social media post on Monday that it will be a “very bad day” for Iran if it does not make a deal.
“Crude oil remains at the very top of the $55-$66.50 trading range that has defined the past six months,” Tony Sycamore, an IG market analyst, said in a note to clients.
“A sustained break above the top of this range would open the way for further gains towards $70.00-$72.00. Conversely, signs of de-escalation would likely see a retracement back towards $61.00.”
On the trade policy front, Trump on Monday warned countries against backing away from recently negotiated trade deals with the US after the Supreme Court struck down his emergency tariffs, saying that he would hit them with much higher duties under different trade laws.
Trump said on Saturday he would raise a temporary tariff from 10 per cent to 15 per cent on US imports from all countries, the maximum level allowed under the law.
Meanwhile, Ukrainian drones have struck a Russian pumping station serving the Druzhba oil pipeline set up to supply Moscow’s crude to Eastern Europe, a Ukrainian security official said on Monday.
