Oil prices bounced around on Monday in see-saw trading, with some investors taking profits after signs of progress in the U.S.-Iran nuclear talks while others kept bullish sentiment bolstered by rising consumption amid ongoing supply constraints.
U.S. West Texas Intermediate crude fell 33 cents, or 0.4%, to $91.98 a barrel, having dived to as low as $91.35 earlier in the session and risen to as high as US$92.73.
U.S. President Joe Biden’s administration on Friday restored sanctions waivers to Iran to allow international nuclear cooperation projects, as the talks on the 2015 international nuclear deal enter the final stretch.
“The market tone remained bullish, with investment bankers predicting Brent hitting US$100 a barrel and global supply continuing to be tight with OPEC+ not reaching their output targets and the United States not raising output much,” he said.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, are struggling to meet targets despite pressure from top consumers to raise production more quickly.
In the United States, even though the rig count has climbed for a record 18 months in a row, oil production is still far from pre-pandemic record levels.
U.S. demand for distillates has been running ahead of pre-pandemic levels for months on strong manufacturing and trucking activity.