Oil prices stabilize as investors eye US-Iran nuclear talks


By Florence Tan

SINGAPORE (Reuters) – Oil prices were mixed on Thursday after recovering on an unexpected drop in US crude inventories in the previous session, as investors await the outcome of US-Iran nuclear talks, which sent global markets could quickly add crude stocks.

Brent crude futures were down 10 cents, or 0.1%, at $91.45 a barrel by 0130 GMT, while US West Texas Intermediate crude was at $89.74 a barrel, up 8 cents.

The robust recovery in demand in the wake of the coronavirus pandemic has kept global oil stocks resilient, with inventories at key fuel hubs around the world teetering at multi-year lows.

U.S. crude inventories fell 4.8 million barrels to 410.4 million barrels in the week ended Feb. 4 — the lowest level for commercial inventories since October 2018, the Energy Information Administration said. Analysts had forecast an increase of 369,000 barrels in a Reuters poll.

US product supply — the best indicator of demand — peaked at 21.9 million barrels per day (bpd) over the past four weeks on strong economic activity across the country, EIA data showed.

The surprise crude withdrawal reinforces how tight the oil market remains, OANDA analyst Edward Moya said in a note.

“Crude prices have too many catalysts supporting a move to $100 oil in the near term,” he said, citing geopolitical tensions in Europe and the Middle East and improving global demand as normal travel in resumed in large parts of the world.

However, investors are closely watching the outcome of US-Iran nuclear talks, which resumed this week. A deal could lift US sanctions on Iranian oil and ease global supply shortages.

The White House on Wednesday publicly pressured Iran to quickly revive the 2015 Iran nuclear deal, saying it will be impossible to return to the deal unless an agreement is reached within weeks.

“The core uncertainty remains as to whether Iran is ready to sign the dotted line,” said Eurasia analyst Henry Rome, adding that the consultancy was sticking to a 40 percent call for a return to the deal.

Separately, US President Joe Biden and King Salman of Saudi Arabia discussed energy supplies and developments in the Middle East, including Iran and Yemen, during a phone call on Wednesday.

Salman also spoke about maintaining balance and stability in oil markets and stressed the need to maintain the OPEC+ supply deal, state news agency SPA said.

In Europe, US Vice President Kamala Harris will meet with her allies and partners in Munich next week to deter Russian aggression in Ukraine.

(Reporting by Florence Tan; Editing by Kenneth Maxwell)


Comments are closed.