WTI and Brent Dip Amid US-Iran Nuclear Negotiations

Oil prices experienced a notable dip as the geopolitical risk premium that had been driving prices higher softened. WTI crude futures fell 1.2% to $64.34 per barrel, and Brent crude dropped 1.3% to $68.58, following confirmation that the United States and Iran will hold nuclear talks in Oman. This announcement, signaling potential diplomatic progress, reduced the immediate concerns of supply disruption that had been previously priced into the market due to rising Middle East tensions.

While this relief was temporary, the broader oil market remains highly sensitive to geopolitical developments. Ongoing risks, such as potential US policy actions toward Iran and India's continued Russian oil purchases, still loom over the market. The supply situation is constrained, with OPEC+ maintaining disciplined output and limited spare capacity in many producing countries, making oil prices highly responsive to any further disruptions.

Despite the pullback, traders are cautious, weighing hopes for de-escalation against the uncertainty of prolonged negotiations. If talks fail or tensions rise again, oil prices could quickly reverse their recent retreat.

Read more on the key levels to watch for oil, the potential impact of ongoing negotiations, and how these factors are shaping market trends.