Oil rises suddenly after Iran’s questioning of an agreement with Washington

Oil prices recorded a sudden rise today, Friday, after Iran revived doubts about the future of talks with the United States on a possible nuclear agreement.

Brent crude jumped by 1.1% to trade above $ 65 a barrel, following the statements of Iranian Foreign Minister Abbas Araqji, who said that his country sees “contradictory and inconsistent positions” by American negotiators.

West Texas’s intermediate crude ascended, but both of the tissues decreased their gains later. US President Donald Trump had indicated at the beginning of the week that his country is close to concluding an agreement with Tehran.

Although reaching an agreement may pave the way for the return of limited Iranian supplies to the market in the event of a reduction in the sanctions, these supplies will enter a market that is already preparing to break the supply. On Thursday, the International Energy Agency renewed its expectations for the new supply, as well as the resumption of production from the OPEC+coalition, beyond the pace of slowdown this year and next, threatening a global surplus.

“We do not exaggerate the impact of the deal on Iranian supplies, it may only add between 200 to 300 thousand barrels per day, a quantity that is not huge,” said Robert Rene, head of commodity and carbon research at Wespac Bank, adding that “Brent crude will likely remain within a range between 60 and 65 dollars in the coming weeks.”

Oil prices are tending to achieve weekly gains for the second time in a row, driven by cautious optimism about the improvement of demand after a rapprochement in positions between China and the United States, the world’s largest oil consumers. Nevertheless, prices are still low in more than 10% since the beginning of the year, under the weight of commercial ambiguity and the acceleration of supplies from “OPEC” and its allies.

Meanwhile, some future oil contracts still show the “contang” pattern, a negative price trend in which the closest contracts are traded for less than that distant. The difference between the two nearest decades of December of Brent crude fell to its lowest level in more than a week.