Crude oil prices were on course for their first weekly decline in four weeks as the United States and Iran signaled they were willing to continue negotiating instead of escalating to a hot war.
At the time of writing, Brent crude was trading at $71 per barrel, with West Texas Intermediate at $65.56 per barrel, after three weeks of gains. Brent crude has gained more than $3 per barrel over the past four weeks, and WTI is also up by some $3 per barrel.
“Traders are in wait-and-see mode heading into the weekend with Iran tensions mounting on one hand, and the OPEC+ meeting on Sunday with a likely production hike on the other hand,” Sparta Commodities analyst June Goh said, as quoted by Reuters.
The latest round of talks between the United States and Iran took place on Thursday, concluding without a deal but with “significant progress” and plans to meet again soon—likely as soon as next week, according to the mediator in the Geneva negotiations, Omani Foreign Minister Badr Albusaidi.
The Saudi Gazette reported, however, that Iran’s government had said before the talks had ended that it planned to continue its uranium enrichment program and disagreed with the suggestion of moving that program abroad.
Before the outcome of the Thursday talks was made public, ING commodity strategists said in a note that “A constructive resolution would likely prompt the market to gradually unwind as much as a $10/bbl risk premium, which we believe is currently priced in. If talks break down, the upside risk remains, but the market may hold off on a full reaction until the scale of potential US action against Iran becomes clearer.”
U.S. President Donald Trump has given Iran until the end of next week to agree to a nuclear deal, threatening military action if the deadline is not met by the Iranian side.
By Irina Slav for Oilprice.com
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