Oil Weakens, Market Weighs Chances of US-Iran Nuclear Deal
Oil prices fell at the start of the week as investors weighed the chances of a nuclear deal between the United States and Iran. The market expected another round of negotiations to take place later this week, amid an increased US troop presence in the Middle East that has kept geopolitical tensions high.
Brent weakened to near $71 per barrel after closing virtually unchanged on Friday. The decline occurred despite US President Donald Trump's statement that he was considering the option of a limited military strike against Iran. Meanwhile, WTI also fell in Monday's trading.
From Tehran, Iranian Foreign Minister Abbas Araghchi told CBS's "Face the Nation" program on Sunday that there was a "good chance" of reaching a mutually beneficial diplomatic solution, and that such a solution was "within reach." He also expressed hope of meeting US special envoy Steve Witkoff in talks reportedly scheduled for Geneva.
Throughout the year, oil prices strengthened, despite market expectations of a potential oversupply. However, concerns about a US-Iran conflict have increased the risk premium and pushed prices higher in several phases.
This uncertainty has led market participants to actively hedge, as evidenced by the surge in activity in the futures and options markets. Short-term focus is now on signals from the diplomatic channel: whether negotiations are truly moving toward an agreement or instead triggering a new escalation that will further drive up prices. (alg)
Source: Newsmaker.id
