HOUSTON :Oil prices eased 1.5 per cent on Tuesday, spurred by worries of a supply glut after Iranian and U.S. delegations made some progress on their talks and on expectations that OPEC+ will decide to increase output at a meeting later this week.
Brent crude futures were down 99 cents, or 1.5 per cent, at $63.73 a barrel by 1457 GMT. U.S. West Texas Intermediate crude fell $1.02, or around 1.7 per cent, to $60.48 a barrel.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, is not expected to change policy at a meeting on Wednesday.
However, another meeting on Saturday is likely to agree to a further accelerated oil output hike for July, three delegates from the group told Reuters.
Meanwhile, Iranian and U.S. delegations wrapped up a fifth round of talks in Rome last week. While signs of some limited progress emerged, there were many points of disagreement that were hard to breach, notably the issue of Iran’s uranium enrichment.
If nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian oil supply, while any resolution could add Iranian supply to the market.
Supporting prices, U.S. President Donald Trump’s decision to extend trade talks with the European Union until July 9 alleviated immediate fears of tariffs that could suppress fuel demand. Wall Street opened higher on Tuesday on Trump’s trade reprieve.
Easing trade concerns were supportive, said UBS analyst Giovanni Staunovo, adding that upside to prices remains limited until it is clear what OPEC+ will decide on Saturday.
The dollar strengthened on Tuesday as the yen came under pressure from a sharp fall in Japan’s long-dated bond yields, while investors took comfort from Trump’s decision to delay higher tariffs on the European Union.
