US-Iran Closer to Deal, Oil Holds Downward
Oil prices held off losses after the United States and Iran both struck a more positive tone following talks on Tehran's nuclear program. This sentiment reduced the risk premium in the oil market, as market participants assessed the chances of de-escalation as increasing.
In the market, West Texas Intermediate (WTI) moved virtually unchanged above $62 per barrel, after closing down 0.9% on Tuesday following a long US holiday. Meanwhile, Brent held above $67, although it also weakened at the close.
On the diplomatic front, Iran stated that it had reached a "general agreement" with Washington on the framework of conditions leading to a potential deal. A US official also said Iranian negotiators were scheduled to return in two weeks with a new proposal, prompting the market to wait for details.
Annually, oil prices were driven up by geopolitical factors—including tensions over Iran—overpowering warnings that the global market was at risk of a supply surplus that could depress prices. The situation in Iran, which sparked a wave of anti-government protests in January, has also raised concerns about disruptions to production and strategic supply lines.
However, signs of diplomatic progress have come amid escalating military tensions. Iran announced on Tuesday that it would partially close the Strait of Hormuz for several hours for military exercises, while the US reportedly sent a second aircraft carrier to the region. In Asia, the March WTI contract edged down 0.1% to $62.25 per barrel at 7:30 a.m. Singapore time.
At its previous close, the April Brent contract fell 1.8% to $67.42 per barrel on Tuesday. Looking ahead, market attention is expected to be focused on the continuation of negotiations in the next two weeks and security dynamics in the Strait of Hormuz, as both have the potential to reshape risk premiums and the direction of oil prices. (asd)
Source: Newsmaker.id
