Crude oil prices began trade with a gain this week following the news that President Donald Trump had extended the deadline for a trade deal with the European Union to early July.
The extension was granted to Brussels after Commission president Ursula con der Leyen said the EU needed more time to draft a deal and after Trump said he’d slap 50% tariffs on EU imports beginning next month because the EU deal was so slow in coming.
“A nice push higher in crude oil and U.S. equity futures this morning after U.S. President Trump extended the deadline,” IG analyst Tony Sycamore told Reuters.
At the time of writing, Brent crude was trading at $64.96 per barrel and West Texas Intermediate was changing hands for $61.68, both up from Friday, after posting yet another weekly loss last week on the prospect of a nuclear deal between the United States and Iran, and more production from OPEC+.
The second factor, by the way, is keeping a lid on prices, countering bullish developments such as the tariff delay for the European Union. There have been reports that OPEC+ will add another 411,000 barrels daily to its combined output in July after agreeing to add the same amount in June. Due to the perception of an oversupplied market, this prospect is having an extended negative effect on prices.
Meanwhile, the latest round of talks between the United States and Iran regarding the latter’s nuclear program ended on Friday in Rome with what media perceived as limited progress. Both sides are sticking to their conditions but both appear to be open to further negotiations.
“We have just completed one of the most professional rounds of talks … We firmly stated Iran’s position … The fact that we are now on a reasonable path, in my view, is itself a sign of progress,” Iranian Foreign Minister Abbas Araqchi told media as quoted by Reuters.
“The talks continue to be constructive – we made further progress, but there is still work to be done,” a U.S. official whom Reuters did not name said.
This suggests that it may still be a while until Iranian crude returns to global markets without restrictions, so the next oil price slump is not yet around the corner.
By Irina Slav for Oilprice.com
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