Oil prices showed little change as investors assessed the implications of upcoming talks between the United States and Iran aimed at reducing tensions, while expectations grow for higher output from the Organization of the Petroleum Exporting Countries and its allies OPEC Plus in the coming period.
Brent crude futures edged lower to 67.52 dollars per barrel, while West Texas Intermediate traded at 62.72 dollars per barrel. Global financial markets are expected to see limited activity due to the Lunar New Year holidays in China, South Korea, and Taiwan, along with the Presidents Day holiday in the United States.
Over the past week, benchmarks recorded weekly losses after remarks from the US President suggested the possibility of reaching an agreement with Tehran within the next month. The two countries are set to hold a second round of talks in Geneva regarding the Iranian nuclear program and efforts to avoid a new military confrontation.
The Iranian side is seeking a nuclear agreement with the United States that delivers economic benefits for both parties, including investments in the energy and mining sectors and aircraft purchases, according to an Iranian diplomat. Meanwhile, the United States has deployed a second aircraft carrier to the region and prepared for the possibility of a prolonged military campaign should negotiations fail. Iran Revolutionary Guard warned it would respond to any strikes targeting Iranian territory by attacking US bases.
Analysts at SEB Bank stated that escalating tensions could push Brent crude toward 80 dollars per barrel, while easing tensions may drive prices down to 60 dollars per barrel. This comes as OPEC Plus considers resuming production increases starting in April after a three month pause in an effort to manage price movements.
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