Oil prices rose on Friday but were on track to post a weekly decline after Iran and the US decided to extend their nuclear talks to next week, with focus also on the upcoming Opec+ meeting on Sunday.
Brent, the benchmark for two thirds of the world's oil, was up 1.71 per cent at 2.42pm UAE time to $71.91 a barrel, while West Texas Intermediate, the gauge that tracks US crude, was trading 1.9 per cent higher at $66.42 a barrel.
Oil prices have been volatile this week due to worries about a potential conflict between the US and Iran that could disrupt global oil supplies.
“US crude briefly slipped below $64 per barrel on reports of 'significant progress' in negotiations between Washington and Tehran, but rebounded as talks were paused and pushed to a later date – keeping geopolitical risk alive, including the possibility of disruption to oil flows through the Strait of Hormuz,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The indirect talks between Iran and the US in Geneva were described as positive by all sides. However, the prospect of conflict remains as a second American aircraft carrier approaches the region.
US President Donald Trump has warned that his “armada” is ready to attack if Tehran does not make a deal, giving the regime a deadline that is fast approaching.
Ms Ozkardeskaya said the medium-term outlook for oil is broadly unchanged and “crude could give back part of its recent gains once tensions ease”.
“But until then, a direct military escalation involving Iran could push US crude into the $70–80 per barrel range, depending on intensity.”
Investors are also keeping a close eye on the Opec+ meeting on Sunday. The group is expected to boost production by 137,000 barrels per day for April after suspending output hikes for the first quarter, Reuters reported, citing sources.
After returning 2.9 million bpd to the market since April last year, the group paused production increases for the first quarter of this year and reaffirmed that stance at an online meeting this month.
The eight Opec+ countries – Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman – will meet on March 1 to review market conditions and decide on production increases.
