Oil declines as US-Iran nuclear talks struggle

International benchmark Brent crude rose on Tuesday and extended the gains for the third straight session, amid concerns that the US-Iran nuclear talks would collapse, leading to more sanctions on the Iranian oil industry.

Oil prices are also supported by the dollar’s decline to a two-week trough against a basket of major rivals, making the greenback-denominated commodities cheaper to holders of other currencies.

Prices

Brent crude rose 0.7% today to $65.95 a barrel, with a session-low at $65.18.

Brent rose 0.25% on Monday, the second profit in a row.

US-Iran Talks

Iranian state media reported that US-Iran nuclear talks won’t bear results as Washington insists on removing Tehran’s uranium enrichment completely. 

On Sunday, US Special Envoy Steve Witkoff said Washington will demand a complete ceasement from enrichment to reach a deal.

Such a potential deal would’ve led to reduced USS sanctions and allowed Iran to raise its exports between 300 to 500 thousand bpd.

US Dollar

The dollar index fell 0.4% on Tuesday to a two-week trough at 100.05 against a basket of major rivals.

Moody’s finally joined Standard & Poor and Fitch and downgraded the pristine US credit rating by one notch, pointing to the persistent US budget deficit and higher borrowing costs as reasons for concern.

US President Donald Trump once again called on the Federal Reserve to cut rates soon as a necessary measure to support the US economy against increasing global challenges.