Oil was up Tuesday morning in Asia, steadying from its gains over the past few sessions. Investors continue to assess Iran’s chances of returning to international crude markets, as well as the U.S. economy’s recovery from COVID-19 just ahead of the summer driving season.
Brent oil futures were up 0.29% to $68.57 by 10:02 PM ET (2:02 AM GMT) and WTI futures were up 0.23% to $66.20.
Oil exporter Iran is due to resume indirect negotiations with the U.S. in Vienna over the week. Iran also extended the deadline for the U.N.’s International Atomic Energy Agency to inspect its atomic program under the duo’s monitoring agreement.
However, some investors were skeptical about the prospect of an Iranian return.
“U.S. Secretary of State Antony Blinken poured cold water over the prospect of a revival, stating that there was no indication that Iran is willing to comply with nuclear commitments,” OANDA market analyst Sophie Griffiths said in a note.
On the supply side, the market will likely be able to absorb the extra barrels should Iran return to the global crude market as the global rollout of COVID-19 vaccines continues to boost fuel demand, according to Goldman Sachs Group Inc.
The black liquid is set to record another month of gains, its fourth, as the fuel demand outlooks in countries such as the U.S., Europe and China brightens. These countries have seen their numbers of COVD-19 cases and deaths continue to fall and have thus been able to ease restrictions.
However, the fuel demand outlook remains bleaker elsewhere. The U.S. State Department raised its travel advisory for Japan to level four on Monday, while Australia’s Melbourne tightened restrictions on gatherings as it deals with its latest, albeit small, outbreak.
New COVID-19 cases in India, the world’s third-largest oil importer, rose by 222,315, on Monday according to government data. Although the number was the biggest 24-hour increase globally, the number of cases in the country is slowly decreasing from record highs of over 400,000 earlier in the month.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.