Oil prices steadied on Tuesday due to uncertainty in US Iran negotiations and Russia-Ukraine peace talks, while new government data delivered a cautious outlook for top crude-importer China’s economy.
Brent futures slipped 25 cents, or around 0.4%, to $65.28 a barrel by 1222 GMT.
June US West Texas Intermediate crude futures, which expire on Tuesday, were down 20 cents, or 0.3%, to $64.6, while the more active July contract was down 19 cents, or around 0.3%, at $61.95 a barrel.
Iran’s Supreme Leader Ali Khamenei voiced doubts over whether nuclear talks with the US will lead to an agreement, Mehr News reported, as Tehran reviews a proposal to hold a fifth round of negotiations, Reuters reported.
A deal between the two countries would allow Iran to raise oil exports by 300,000 barrels to 400,000 barrels per day if sanctions were eased, StoneX analyst Alex Hodes said.
Prices were capped by US President Donald Trump indicating that he was not ready to join Europe with fresh sanctions to pressure Moscow, while President Vladimir Putin and Ukraine would immediately start negotiations for a ceasefire.
“An immediate resolution of the Russia/Ukraine war does however look unlikely. So while it could lead to more oil from Russia into the market, it is out in time and uncertain as Russia is still bound by its obligation to OPEC+,” chief commodities analyst Bjarne Schieldrop said.
Piling more pressure on oil prices was data showing decelerating industrial output growth and retail sales in China, the world’s top oil importer, with analysts expecting a slowdown in fuel demand.
However, the analysis did not reflect a 90-day pause on tariffs between the US and China, with Goldman Sachs pointing to a pickup in China trade flows late on Monday.
Beyond macroeconomics, geopolitics and the current headline-trading environment, it is hard to ascertain when “the mood would take a handbrake turn,” analyst Tamas Varga wrote to clients.
