Oil Prices Remain Steady Amid Volatile Trading Amid US, Iran Diplomatic Developments

Global Oil Markets Remain Volatile as U.S.-Iran Talks Continue

Oil prices were relatively unchanged in Thursday's trading session, influenced by ongoing negotiations between the U.S. and Iran. Brent crude futures increased by 28 cents, or 0.4%, to $71.13 per barrel, while WTI futures rose 13 cents, or 0.2%, to $65.55.

The U.S. and Iran engaged in indirect talks in Geneva on Thursday to resolve their long-standing nuclear dispute, with the goal of preventing a conflict. The talks were facilitated by Omani Foreign Minister Sayyid Badr Albusaidi, who reported significant progress made during the meeting. However, the talks are expected to remain a key focus for oil markets, with any signs of a breakdown likely to lead to higher prices due to concerns over Middle East supply disruptions.

U.S. crude inventories surged by 16 million barrels last week, according to the Energy Information Administration, which may have contributed to the limited price gain. Additionally, Saudi Arabia is reportedly increasing oil production and exports as a contingency plan in case of a U.S. strike on Iran. OPEC is considering a 137,000 barrels per day output increase in April, as the group prepares for peak summer demand.

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An extended conflict between the U.S. and Iran could disrupt supplies from the region, including from Iran, OPEC's third-largest crude producer. Analysts at ING estimate that a constructive resolution to the talks could lead to a gradual unwinding of the $10 per barrel risk premium currently built into oil prices.