The rise in oil prices is being restrained by the possibility of additional supplies from Iran and OPEC+ countries. Despite this, oil prices continue to rise against the backdrop of easing trade tensions between the U.S. and China.
This is reported by Finway
Brent crude oil futures increased by 29 cents, reaching $64.82 per barrel, while U.S. West Texas Intermediate crude futures jumped by 27 cents to $61.89 per barrel. However, the increase in the value of “black gold” is somewhat tempered by potential additional oil supplies to the market.
“The enthusiasm generated by progress in U.S.-China relations has allowed oil prices to recover,” said Harry Chiligirian, head of the analyst group at Onyx Capital Group.
Analysts also note that progress in negotiations regarding Iran’s nuclear program, as well as OPEC+ countries’ acceleration in moving away from production quotas for “black gold,” is restraining price growth.
U.S. President Donald Trump stated that the U.S. is nearing a nuclear deal with Iran, and Tehran has “reportedly” agreed to its terms. However, a source familiar with the negotiations reported that there are still issues that need to be resolved.
According to analysts at ING, the nuclear deal would allow Iran to increase oil production, adding 400,000 barrels per day to the market. Despite this, Brent and WTI oil prices have risen by approximately 1.5% this week.
Market sentiment for oil has improved after the U.S. and China, the two largest economies in the world, agreed to a 90-day pause in the trade war, during which both sides will significantly reduce tariffs.
However, BMI analysts, a division of Fitch Solutions, noted in their research that “while the 90-day truce leaves the door open for further progress in reducing trade barriers on both sides, uncertainty regarding long-term trade policy will limit the potential for price growth.”