Markets pared losses as they assessed progress in US-Iran talks
Oil prices stabilized in Asian markets on Wednesday after falling nearly 2% in the previous session. Investors are assessing the fundamentals for US-Iran talks to evolve into a final agreement that could ease supply concerns.
Brent futures rose 23 cents, or 0.34%, to $67.65 a barrel as of 04:12 GMT, while WTI crude rose 19 cents, or 0.3%, to $62.52. Both are at their lowest levels in about two weeks.
Iran said on Tuesday that Iran and the US had reached an agreement on basic principles in talks aimed at resolving the long-running nuclear dispute, but that this did not mean an agreement was imminent.
Following these statements, analysts remained skeptical about the potential for further progress.
Crude oil prices appear poised for a technical rebound. However, a final agreement is far from imminent, and markets remain cautious about the sustainability of diplomatic momentum.
The market does not stabilize if the possibility of a US military strike against Iran remains a constant concern.
Another factor influencing oil prices was news from Russian media that production at the Tengiz oil field in Kazakhstan, one of the world's largest oil fields, had increased following a halt in January. Tengiz is scheduled to reach full capacity by February 23rd.
The market will focus on the weekly reports from the American Petroleum Institute (API), to be released later today, and the Energy Information Administration (EIA), the statistical arm of the US Department of Energy, on Thursday.
Analysts expect US crude oil inventories to have increased last week, while distillate and gasoline inventories to have decreased. In the week up to February 13, crude oil inventories are estimated to have increased by approximately 2.3 million barrels, gasoline inventories decreased by about 200,000 barrels, and distillate fuel inventories, including diesel and heating oil, fell by about 1.6 million barrels.
Meanwhile, Ukrainian and Russian negotiators completed the first day of US-mediated peace talks in Geneva on Tuesday, with Trump urging Kyiv to quickly reach an agreement to end the four-year conflict.
Any sharp shift in this geopolitical axis adds a risk premium to prices.
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