Crude gains after Raisi named new Iranian president
Crude oil prices pushed higher Monday, helped by a pause in Iranian nuclear talks, delaying the resumption of crude exports from the Persian Gulf country into the global market.
By 6:30 AM ET, U.S. crude was up 0.6% at $71.72 a barrel, while Brent was up 0.6% at $73.94.
Both benchmarks have posted strong gains this year, over 40% year-to-date, as successful vaccination programs have resulted in a lot of the high energy-consuming countries reopening their economies, ahead of the summer holiday season.
Last week, Brent recorded its highest price since April 2019 and WTI its highest since October 2018.
This positive tone has been helped Monday by the adjournment of talks between Tehran and the western powers, and the U.S. in particular, over reviving the 2015 nuclear deal after the election of hardline judge Ebrahim Raisi as Iran’s new president.
This result could well delay any agreement as Raisi is on the U.S. sanctions list for human rights abuses and Tehran insists penalties must be removed if the nuclear pact is to be revived.
This pause comes as Reuters reported that Iran has begun moving some of its stored oil into tankers so it can quickly resume exporting its crude should a deal be signed, resulting in the U.S. lifting sanctions on the Iranian energy sector.
Further gains also look likely, judging by the latest positioning data. Speculators increased their net long positions in both ICE Brent and Nymex WTI by over 20,000 lots in the last reporting week.
“The bulk of this increase was driven by fresh longs entering the market,” said analysts at ING, in a note. However, “it is important to point out that this data predates the FOMC meeting, and so positioning is likely to be somewhat different currently.”