Oil prices slip but still near one-week highs

London — Oil prices slipped on Tuesday, but were near one-week highs after jumping more than 3% the previous session as investors tempered expectations of an early return of oil exporter Iran to international crude markets.

Brent crude futures were down 30c, or 0.4%, at $68.16 a barrel by 10.04am GMT, having jumped 3% on Monday. US West Texas Intermediate (WTI) futures were off 42c, or 0.6%, at $65.63 a barrel, after gaining 3.9% the previous session.

Indirect negotiations between the US and Iran are due to resume in Vienna this week. Talks were given another life after Tehran and the UN nuclear agency extended a monitoring agreement on the Middle Eastern country’s atomic programme.

US secretary of state Antony Blinken said on Sunday that the US has not yet seen whether Iran will move to comply with its nuclear commitments to have sanctions removed, even as ongoing talks have shown progress.

“It seems the market no longer expects the nuclear agreement between the US and Iran to be reinstated in the near future or, therefore, that Iranian oil exports will quickly return to the global market,” Commerzbank said in a note.

Still, the global recovery from the Covid-19 pandemic is patchy, indicating a mixed outlook for oil demand.

Parts of Europe and the US are recording fewer infections and deaths, prompting governments to ease restrictions, but in other areas such as India — the world’s third-biggest oil importer — rates are still high.

New coronavirus infections in India rose by 222,315, government data showed on Monday, the world’s biggest 24-hour increase, though numbers have fallen off highs of more than 400,000 earlier this month.

The German economy shrank more than expected in the first quarter as coronavirus-related restrictions spurred householders to put more money than ever into savings, data showed on Tuesday.

Reuters