Oil Swings as Traders Seek Next Clues on Iran Nuclear Deal

(Bloomberg) -- Oil bounced between small gains and losses as Iran cast fresh doubts about the status of nuclear talks with the US. 

Brent traded below $65 a barrel after jumping as much as 1.1% on comments by Iran’s foreign minister Abbas Araghchi. He said he saw “many opposing and contradictory positions” from US negotiators. 

Prices slumped on Thursday when President Donald Trump suggested the two sides were closer to a deal, which could pave the way for some extra supply from Iran. But those barrels would have a limited impact in a market already gearing up for a surplus.

The International Energy Agency on Thursday reiterated that it expects an increase in new production worldwide to exceed slowing demand growth this year and next, creating a global glut. The excess supply could be even bigger if the Organization of the Petroleum Exporting Countries and its partners confirm further output increases.

“We wouldn’t overstate the impact on Iranian supply here — a deal might add 200,000 to 300,000 barrels a day to Iranian exports, which isn’t enormous,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp. “We maintain the view that Brent should remain in a $60 to $65 holding pattern in the weeks ahead.” 

Oil is set to eke out a second weekly gain, after jumping on the détente in the trade conflict between the US and China, the biggest crude consumers. Prices are still down more than 10% this year thanks to the twin hit of trade uncertainties and faster-than-expected output increases by the OPEC+. 

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