Oil prices pulled back slightly on Tuesday on the latest progress in last-ditch talks to revive the 2015 Iran nuclear accord, which would clear the way to boost its crude exports in a tight market. Brent crude futures dropped 14 cents, or 0.1%, to $96.51 a barrel, paring a 1.8% gain from the previous session. U.S. West Texas Intermediate (WTI) crude futures down by 16 cents, or 0.2%, to $90.60 a barrel, after climbing 2% in the previous session.
“While the details around the timing of the resumption of Iran’s oil exports remain uncertain even if the accord is revived, there is certainly scope for Iran to increase oil exports relatively quickly,” Commonwealth Bank analyst Vivek Dhar said in a note.
However, signs that demand may not be reduced as much as feared are keeping a floor under the market for now, following stronger-than-expected trade data from China on the weekend and the surprising acceleration in U.S. jobs growth in July. The oil market has remained under pressure recently over global recession fears, with Brent prices suffering their biggest weekly drop last week.
China, the world’s largest crude oil importer, brought in 8.79 million barrels per day of crude in July, 9.5% lower from a year earlier but up from June’s import volumes, according to China’s customs data. Traders will also be watching out for weekly U.S. oil inventory data, first from the American Petroleum Institute on Tuesday and then the Energy Information Administration on Wednesday.