By Ambar Warrick
Investing.com-- Oil prices rose on Tuesday as Saudi Arabia threatened production cuts to offset a potential Iran-led supply glut, while contrasting statements over the nuclear deal between Tehran and Washington indicated that an agreement was further away than previously anticipated.
U.S.-traded crude oil West Texas Intermediate Futures rose 0.4% to $90.75 a barrel, while London-traded Brent oil futures rose 0.1% to $96.81 a barrel by 20:02 ET (00:02 GMT).
Oil prices reversed initial losses on Monday, settling flat in a volatile session after Saudi Arabia- the leader of the Organization of Petroleum Exporting Countries (OPEC), said it could cut crude production to stabilize prices.
Saudi Arabia’s comments came just after reports of progress towards a renewed Iran nuclear deal sent oil prices spiraling. The deal- which will see the lifting of several Western sanctions against Tehran- is expected to release over 1 million barrels per day of crude supply.
But Iran later on Monday said the U.S. was dragging its feet in efforts to revive the nuclear deal, and accused the European Union of inaction, Reuters reported. The EU is facilitating negotiations between the two countries.
Washington denied Tehran’s accusations, and said that a deal was closer than ever thanks to apparent flexibility on the West Asian nation’s side. Iran is reportedly open to dropping its demand that the U.S. drop its designation of the Islamic Revolutionary Guard Corps as a terrorist organization.
The demand has been a major sticking point for the deal.
But an Axios report on Monday suggested that pressure from Israel on the U.S. may further stymie the deal. Israel is concerned that Tehran could use the new revenue stream from oil exports to fund more terror activities against Jerusalem.
News of the nuclear deal has largely dictated oil price movements in recent weeks, after the EU flagged progress in negotiations.
But beyond the deal, oil prices also have to contend with signs of slowing economic activity across the globe- a move that could lead to weaker demand in 2022.