Oil prices were close to a seven-month high early on Tuesday amid speculation about potential U.S. strikes on Iran as a last-ditch round of talks approaches with what analysts see minimal chances of success.
After rising in Asian trade, the two major crude oil benchmarks were near parity on the morning ET on Tuesday, but still hovering near seven-month highs as traders assess the chances of a new U.S. military campaign in Iran.
The U.S. benchmark, WTI Crude, was up 0.26% to trade at $66.48 per barrel as of 7:46 a.m. ET.
The international benchmark, Brent Crude, was slightly up by 0.10% at $71.56 per barrel.
Prices have somewhat softened since Monday’s settlement after Iran signaled there still could be a chance of a diplomatic solution in the tense talks.
Moreover, the U.S. Supreme Court’s decision to strike down President Donald Trump’s ‘retaliatory tariffs’ on the world inserted renewed concerns about global trade and economies in the markets. Traders and speculators fled to safe-haven assets such as gold, again, leaving riskier asset classes like crude oil.
The tariffs and President Trump’s insistence that the world “pay for” ripping off the United States with a new set of blanket 15% tariffs will likely be on the backburner for the rest of the week as the U.S. and Iran are set for a crucial round of indirect talks in Geneva on Thursday.
Analysts started assessing the chances of $100 per barrel oil ahead of the talks.
Oil price spikes to $90-$100 per barrel are “within reach” as the United States and Iran appear close to war, Fereidun Fesharaki, Chairman Emeritus at energy market consultancy FGE NexantECA, told Bloomberg Television on Monday.
“If the Iranians accept what the US says, there is no legitimacy left to the regime anymore; they have to say ‘no’,” the expert added, noting that the talks later this week are bound to fail.
By Michael Kern for Oilprice.com
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