Oil Slightly Stable, Markets Monitor US-Iran Dialogue & Dollar Strengthening
Oil prices edged higher in the Asian session on Tuesday (February 3rd) after plummeting sharply the previous day. Brent crude for April rose 0.2% to US$66.42/barrel, while WTI rose 0.3% to US$61.90/barrel—the market is beginning to calm down as geopolitical risk premiums diminish.
The main trigger: the US and Iran scheduled to resume nuclear talks this week in Turkey, with meetings leading up to Friday's session in Istanbul between US envoy Steve Witkoff and Iranian Foreign Minister Abbas Araqchi.
News of these negotiations has exposed market concerns about the potential for regional conflict, causing the "cost of risk" that had previously been attached to oil prices to begin to fade. However, the market is also aware that Iran nuclear negotiations have often stalled in the past, so Friday's outcome will still determine whether tensions truly ease or are just a temporary respite.
Beyond geopolitics, oil is also being held down by a strengthening US dollar. The dollar rebounded after Donald Trump appointed Kevin Warsh as the next Federal Reserve chairman—whom the market considered more hawkish (tighter on inflation) than some market participants had hoped. A stronger dollar typically pressures commodities because it makes them more expensive for non-dollar buyers.
Another area of concern for the oil market is the India-US trade negotiations, which are addressing energy imports. Washington is pushing India to reduce purchases of Russian oil, and there is a debate over supplies to the US/Venezuela—an issue also linked to geopolitical tensions over the Ukraine war. (asd)
Source: Newsmaker.id
