Oil prices edged up today, heading for a second consecutive weekly gain on easing US-China trade tensions, although the optimism was somewhat offset by higher supply expectations from Iran and OPEC+.
Brent crude futures were up 42 cents, or 0.65%, at $64.95 per barrel this afternoon, while US West Texas Intermediate crude futures rose 41 cents, or 0.67%, to $62.03.
The benchmarks were headed for a weekly gain of 1.6% and 1.7% respectively.
The contracts fell by more than 2% in the previous session on the prospect of an Iranian nuclear deal, which could result in an easing of sanctions that could see Iranian crude return to the global market.
“The enthusiasm resulting from progress in relations between the US and China allowed the oil price to recover,” said Harry Tchiliguirian, group head of research at Onyx Capital Group.
“But OPEC+ accelerates the unwinding of its voluntary supply cuts and the U.S.-Iran nuclear talks are still ongoing, keeping the barrels of the latter still flowing to China,” he added.
US President Donald Trump said the US was nearing a nuclear deal with Iran, with Tehran “sort of” agreeing to its terms. However, a source familiar with the talks said there were still issues to resolve.
ING analysts wrote in a note that a nuclear deal lifting sanctions would allow Iran to increase oil output, resulting in additional supply of around 400,000 barrels per day.
Investor sentiment was boosted this week by the US and China, the world’s two biggest oil consumers and economies, agreeing to a 90-day pause on their trade war during which both sides would sharply lower trade duties.
The hefty reciprocal tariffs had raised fears of a sharp blow to global growth and oil demand.
