Oil prices edged higher on Tuesday after traders took advantage of profit-taking from Monday’s low prices, although gains were limited by supply fears after the EU and G7 states banned Russian oil and capped prices at $60 a barrel.
International benchmark Brent crude traded at $83.20 per barrel at 09.54 a.m. local time (0654 GMT), up 0.63% from the closing price of $82.68 a barrel in the previous trading session.
At the same time, American benchmark West Texas Intermediate (WTI) traded at $77.41 per barrel, a 0.62% gain after the previous session closed at $76.93 a barrel.
Brent oil lost more than $5 a barrel on Monday as positive services sector figures reinvigorated fears that the US Federal Reserve may raise rates higher than expected next week.
Economic activity in the US services sector increased in November, raising investor concerns about the Fed raising interest rates again on Dec. 14 despite most economists' warnings about a possible recession next year.
Both benchmarks recovered some of their daily losses as traders cashed in on low prices.
Nonetheless, price upticks were limited as supply concerns increased after OPEC+ producers agreed to maintain their production cut policy in the face of the EU's ban and price cap on Russian oil exports.
Supply fears intensified further after Iran said Monday it would not accept the resumption of nuclear negotiations with the West under pressure or threat.
'Iran is still committed to the negotiation process and seeks to resolve it, but it will not negotiate on the basis of the need for negotiations,' Foreign Ministry spokesman Nasser Kanaani said in statements cited by the state news agency IRNA.
The spokesman said Tehran has abided by the Joint Comprehensive Plan of Action (JCPOA), known as the Iran nuclear deal, but Washington has withdrawn from the agreement.
The Iran nuclear deal was signed in 2015 by Iran, the US, China, Russia, France, UK, Germany and the EU.
Under the agreement, Tehran committed to limiting its nuclear activity to civilian purposes, and in return, world powers agreed to drop their economic sanctions against Iran.
Under former US President Donald Trump, the US unilaterally withdrew from the agreement in 2018 and re-imposed sanctions on Iran, prompting Tehran to stop its compliance with the nuclear deal.
If the deal is renegotiated successfully, Iran will be able to export oil again, which will ease market concerns over tight supply.
(Anadolu Agency, December 6, 2022)
