Oil Prices Spike Amid Iran Nuclear Talks

Oil prices started the week with a jump after Iran said that gaps remain in negotiations involving world powers in reaching a deal that would end U.S. sanctions on its crude.

Brent crude oil futures for July rose $1.25, or 1.9 percent, to $67.69 a barrel by 10:50 WAT, while U.S. West Texas Intermediate for July was at $64.73 a barrel, up by $1.15, or 1.8 percent.

Signs of economic recovery from the COVID-19 pandemic in the U.S, and the improved outlook for fuel demand have also supported today's price gain. Also, the weakening of the dollar has made commodities more attractive to investors.

Oil prices fell almost 3 percent last week after Iran's president, Hassan Rouhani, said the United States was ready to lift sanctions on his country's oil, banking and shipping sectors.

Iran said there are still differences around the timing of when countries will return to compliance with the original 2015 nuclear agreement.

European diplomats said last week that failure to agree on an extension of the monitoring deal would plunge wider, indirect talks between Washington and Tehran on reviving the 2015 Iran nuclear deal into crisis. Those talks are due to resume in Vienna this week.

While the market is anticipating the Islamic Republic’s supply will pick up again by late summer, the demand recovery will be strong enough to absorb it, Goldman Sachs Group Inc said. The bank expects Brent futures to hit $80 a barrel in the next few months.