Brent gains following unproductive US-Iran nuclear talks

The front-month ICE Brent contract has gained by $1.11/bbl on the day from Friday, to trade at $65.16/bbl at 09.00 GMT.

IMAGE: Oil barrels. Getty Images

Upward pressure:

Oil prices have gained over the weekend amid diminishing prospects of a US-Iran nuclear deal.

Both nations concluded a fifth round of talks last week, that showed “some but not conclusive progress” according to media reports citing Iran’s foreign minister Abbas Araghchi.

Tehran has not agreed to stop its nuclear enrichment program, Iran's foreign ministry spokesperson Esmail Baghaei said, as quoted by Reuters, adding that no timeline has been set for the sixth round of talks with Washington.

The agreement could potentially lead the US administration to lift some sanctions on Iranian oil and bring more supply back to the market.

“There are concerns that the Trump administration may tighten sanctions on Iran to force it to drop its nuclear ambitions,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

Downward pressure:

Oil investors' focus is now shifting toward concerns over excess supply as OPEC+ prepares to meet again on 1 June.

“We’re likely to hear lots of noise this week ahead of the OPEC+ meeting on Sunday, 1 June, where the group will decide on output policy for July,” two analysts from ING Bank said.

Market analysts expect the Saudi Arabia-led group to increase output by another 411,000 b/d in July – the third time in a row.

“This should keep the market well supplied over the second half of this year,” the two analysts added.

By Aparupa Mazumder

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