Oil Stabilizes as Optimism About Demand Prevails Over Iran’s Supply Concerns

Oil stabilized today and traded within a narrow range amid optimism about an improvement in fuel demand in the United States, but the possibility of Iranian oil returning to the markets pressures prices.

Brent crude rose 14 cents, equivalent to 0.2%, to $ 68.79 a barrel, and US West Texas Intermediate crude rose one cent or less than 0.1% to $ 66.08.

The summer flight season in the northern hemisphere and the lifting of restrictions on the Coronavirus contributed to an increase in demand, and as a result, crude and fuel stocks decreased last week, according to two sources, according to data from the American Petroleum Institute.

According to the sources, the data indicated that crude inventories fell by 439,000 barrels in the week ending on May 21.

Gasoline stocks decreased by 2 million barrels and distillate stocks decreased by 5.1 million barrels.

Market participants are closely watching the nuclear talks between Iran and the United States that could lead to the lifting of sanctions on Iran’s energy sector and the return of Iranian oil to the market.

Iranian government spokesman Ali Rabiei expressed optimism that Tehran would reach an agreement soon, although the chief Iranian negotiator warned that there were still serious unresolved issues.

Iran and world powers have been negotiating in Vienna since April to agree on steps Tehran and Washington should take on sanctions and nuclear activities to return to full compliance with the nuclear deal.

Analysts said Tehran could pump additional supplies of between one and two million barrels per day to the market if an agreement is reached and sanctions lifted.