Brent declines as Iran and US prepare for a third round of talks

The front-month ICE Brent contract has declined by $0.36/bbl on the day from Friday, to trade at $71.08/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent has found some support after official data from Baker Hughes showed that the US oil rig count was unchanged at 409 in the week ending 20 February.

The rig tally is widely regarded as a forward-looking gauge of US crude output, offering insight into current and anticipated drilling activity in the shale patch.

In a market where supply remains constrained, indications of softer future production can lend upward support to Brent futures.

Downward pressure:

Brent crude’s price has moved lower as market participants focused on renewed possibilities of a negotiation between Washington and Tehran.

The US and Iran are preparing for another round of discussion about the latter’s nuclear enrichment capabilities, Reuters reported. Representatives from both nations will sit for a third round of nuclear talks on Thursday in Geneva, the report added.

“Oil prices are under pressure… with further US-Iran talks scheduled,” according to two analysts from ING Bank.

The news has eased some fears of supply disruption in the oil-rich region, according to market analysts.  

“[Oil] prices are trading softer… with further talks between the US and Iran planned for Thursday, while Iran’s foreign minister said that there is a chance for a diplomatic solution,” ING Bank’s analysts added.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online