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- WTI opens with a modest bearish gap amid easing concerns about a US-Iran conflict.
- The US announced new sanctions on Iran, limiting further losses for the commodity.
- Some follow-through USD selling further seems to lend support to the black liquid.
West Texas Intermediate (WTI) US Crude Oil prices kick off the new week on a weaker note as signs of progress in the US-Iran talks diminish the odds of a military confrontation and the risk of supply disruption. The black liquid, however, bounces off the Asian session low and currently trades around the $63.00 mark, down over 0.50% for the day.
Despite differences over the agenda, indirect talks between the US and Iran on the future of the latter’s nuclear program ended on Friday with a broad agreement to maintain a diplomatic path. Iran’s foreign minister, Abbas Araghchi, described the eight hours of meetings as a good start conducted in a good atmosphere. US President Donald Trump described the talks as very good and said that another meeting would be held early this week. The development eases tensions in the Middle East – a premier global energy hub – and weighs on Crude Oil prices at the start of a new week.
Meanwhile, the US announced new sanctions targeting Iran’s oil and petrochemical trade, hours after indirect talks, keeping a lid on the optimism and limiting the downside for the black liquid. Apart from this, a broadly weaker US Dollar (USD), which tends to benefit the USD-denominated commodities, turns out to be another factor that assists Crude Oil prices in attracting some buyers near mid-$62.00s. This makes it prudent to wait for some follow-through selling before positioning for an extension of the recent pullback from over a five-month high, around the $66.25 area, touched last month.
