Feb 24 (Reuters) - Oil prices hovered below an almost seven-month high on Tuesday as traders gauged the outlook for U.S.-Iran nuclear talks amid heightened Middle East tensions, while also weighing
Oil Prices Dip as Iran Expresses Willingness for US Deal
By Scott DiSavino and Siddharth Cavale
NEW YORK, Feb 24 (Reuters) - Oil prices closed down 1% on Tuesday after Iran said it was prepared to take any necessary steps to clinch a deal with the U.S. ahead of nuclear talks later this week.
Oil Market Reactions to Iran's Diplomatic Moves
Brent futures settled at $70.77 per barrel, down 72 cents or 1.0%. WTI futures settled at $65.63, down 68 cents or 1.0%.
Iran, the third-biggest crude producer in the Organization of the Petroleum Exporting Countries, and the U.S. will hold a third round of nuclear talks on Thursday in Geneva, Oman's Foreign Minister Badr Albusaidi said on Sunday.
The U.S. wants Iran to give up its nuclear program. Iran has denied it is trying to develop an atomic weapon.
Iran's Position on Nuclear Negotiations
Iran's deputy foreign minister said on Tuesday that Tehran was ready to take any necessary steps to reach a deal with the U.S.
Swiss bank UBS said it expected a modest decline in oil prices in coming weeks provided there was no escalation of tensions in the Middle East that could disrupt supply.
U.S. crude prices include a $3-$4 a barrel geopolitical risk premium because of tensions between the U.S. and Iran, the director of North Dakota's Mineral Resources Department said on Monday. North Dakota is the No. 3 U.S. oil-producing state. The oil industry needs crude prices to rise and sustain at $70 per barrel in order to grow output, energy executives said.
Geopolitical Tensions and Market Impact
The U.S. State Department is pulling out non-essential government personnel and their families from the U.S. embassy in Beirut, a senior official said on Monday, as concerns mount about the risk of a military conflict with Iran, which, sources said, was close to a deal with China to purchase anti-ship cruise missiles.
U.S. TARIFFS AND OIL SUPPLIES
US Tariffs and Global Oil Supply Dynamics
Meanwhile, the U.S. began collecting a temporary new 10% global import tariff on Tuesday, but President Donald Trump's administration was working to increase it to 15%, a White House official said, sowing confusion over tariff policies after last week's Supreme Court defeat.
On the supply front, trading houses and buyers of Venezuelan oil have chartered the first very large crude carriers to export from the South American country since a Caracas-Washington supply deal began. This is set to speed up shipments from March while boosting deliveries to India, according to sources and data.
The European Commission will submit a legal proposal to permanently ban Russian oil imports on April 15, three days after Hungary's parliamentary election, according to EU officials and a document seen by Reuters.
Russia's oil pipeline monopoly Transneft has cut crude intake into its system by some 250,000 barrels per day, two sources familiar with the situation said on Tuesday, a day after Ukrainian drones attacked a pumping station serving major oil hubs and ports.
US Oil Inventories and Market Expectations
U.S. OIL INVENTORIES
The market was also awaiting weekly storage reports from the American Petroleum Institute trade group on Tuesday and the U.S. Energy Information Administration on Wednesday.
Analysts projected energy firms added 1.5 million barrels of crude to storage during the week ended February 20. [EIA/S] [API/S]
(Reporting by Scott DiSavino and Siddharth Cavale in New York and Shadia Nasralla in London, additional reporting by Trixie Yap in Singapore and Anushree Mukherjee in Bengaluru, editing by Jan Harvey, Chizu Nomiyama, Alex Richardson and David Gregorio)
