Oil prices extended gains that started on Monday amid rising concerns over supply security.
As of this morning, Brent crude traded at $64.85 per barrel, while West Texas Intermediate (WTI) crude was at $62.82 per barrel, both up roughly 3% from Monday’s closing levels, Reuters reported.
The price rise reflects escalating tensions between Russia and Ukraine, with fears that the conflict could target Russia’s oil infrastructure. Meanwhile, reports indicate Iran is preparing to reject a U.S. nuclear deal proposal requiring a halt to uranium enrichment.
An anonymous source close to Iran’s negotiating team told Reuters, “Iran is drafting a negative response to the U.S. proposal, which may be interpreted as a rejection.” If confirmed, the stalled talks would likely mean continued U.S. sanctions on Iran’s oil industry, sustaining supply restrictions on the OPEC member. China remains the primary beneficiary of discounted Iranian crude.
Adding to supply concerns, wildfires in Alberta have cut daily oil production by about 350,000 barrels, approximately 7% of the province’s total output, supporting upward price pressure.
OPEC+ production updates also influenced market sentiment. Anticipated increases in output did not materialize, prompting relief among traders and a bullish response. Daniel Hynes, senior commodity strategist at ANZ, commented, “With worst-case scenarios avoided, investors closed out bearish positions set before the weekend meeting.”
Furthermore, Bloomberg highlighted that a weakening U.S. dollar is boosting oil prices, with Wall Street forecasting further declines in the currency.
