Oil prices edge lower for the week as risk premium eases and talks persist
Crude markets are on track for their first weekly drop in four weeks as both the United States and Iran signal openness to continued talks instead of escalating toward any outright conflict.
At the time this was written, Brent crude was around $71 per barrel and West Texas Intermediate (WTI) near $65.56 per barrel, marking three weeks of gains for both benchmarks. Over the past month, Brent has risen by a little over $3 per barrel, with WTI posting a similar gain.
“Traders are taking a cautious stance as the weekend approaches, balancing Iran tensions with the prospect of a likely production increase at the upcoming OPEC+ meeting,” commented June Goh of Sparta Commodities, as cited by Reuters.
The latest discussions between the U.S. and Iran concluded without a deal but with what was described as substantial progress and plans to resume talks soon, potentially as early as next week, according to the mediator, Oman’s Foreign Minister Badr Albusaidi.
However, Saudi Gazette reporting indicated that Iran had signaled prior to the talks’ end that it would continue its uranium enrichment program and opposed any plan to relocate that program overseas.
Ahead of the public briefing on the talks, ING commodity strategists noted that a constructive resolution could lead the market to unwind most of the current risk premium—possibly up to $10 per barrel—but that outcome is already somewhat priced in. If talks fail, upside risk would remain, though the market might wait for clearer signs of potential U.S. action against Iran.
Separately, U.S. President Donald Trump has given Iran until the end of next week to seal a nuclear deal, warning of possible military action if the deadline passes without agreement.
By Irina Slav for Oilprice.com
Further reading from Oilprice.com
- Iran Rushes to Ship Oil Ahead of Possible U.S. Strike
- Russia to Tighten Budget Fiscal Rule as Oil and Gas Revenues Plunge
- Oil Prices Tumble as Crucial U.S.-Iran Talks Begin
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