WTI crude rose 2% on Monday morning. European diplomats have expressed “serious doubts” that Tehran is really seeking a revival of the 2015 nuclear deal. A lower US dollar is supporting crude prices.
Oil prices pared some losses on Monday, with Brent gaining nearly 2% as the Iran nuclear deal appeared to fade further and markets refocused on Europe’s upcoming ban on Russian oil and narrow fears of special offer.
At 11:50 am EST on Monday, Brent crude was trading up $1.90 at $94.74 a barrel, up 2.05% on the day. WTI traded up $1.69 at $88.48 a barrel, up 1.95% on the day.
Iran’s nuclear talks appear to be contributing heavily to the rally, with European diplomats expressing “serious doubts” that Tehran is really seeking a revival of the 2015 nuclear deal.
Israeli Prime Minister Yair Lapid, currently in Germany, highlighted what he called “encouraging signs” that the nuclear deal would not be revived, suggesting that Israel’s plans all along were showing success. The absence of a nuclear deal with Iran is keeping Iran’s barrels off the market, further speaking to tight supply, fears of which are currently being offset – at home and abroad – by China’s COVID lockdowns.
Throughout last week, lockdowns in China – the world’s top energy importer – weighed on oil prices amid predictions that the country’s demand could shrink for the first time since 2002 amid mobility restrictions.
By Monday, however, we saw the return of fears that tight supply will not be able to balance strong demand as the European Union’s ban on Russian seaborne crude nears its December 5 implementation deadline and as the G7 sets plans in motion to curb Russian oil prices at the same time.
Also helping boost oil prices, the U.S. dollar, which has jumped about 13% this year, is retreating from earlier highs, starting Monday with a decline ahead of U.S. inflation data due on Tuesday.
By Tom Kool for Oilprice.com
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