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Oil complex eyes potential conclusion of U.S.-Iran nuclear talks

© Reuters. Iran’s and U.S.’ flags are seen printed on paper in this illustration taken January 27, 2022. REUTERS/Dado Ruvic/Illustration/Files

(This Feb 6 story has been refiled to fix typo in the lead)

By Laura Sanicola

(Reuters) – New signals that talks between U.S. and Iranian officials may be nearing a conclusion could take steam out of the oil rally, traders said, after U.S. and Brent crude reached multi-year highs on Friday.

Anticipation that Washington and Tehran have made progress on reviving a deal restricting the OPEC country’s nuclear weapons development would boost crude supply.

If the United States lifts sanctions on Iran, it could boost oil shipments, adding to global supply.

Brent crude fell 5 cents, or 0.1%, to $93.22 a barrel at 10:12 p.m. EST on Sunday (0312 GMT on Monday). The benchmark settled at $93.27 a barrel on Friday having earlier touched its highest since October 2014 at $93.70.

U.S. West Texas Intermediate crude fell 63 cents to $91.68.

“There has been speculation that this rally was going to encourage some sanctions relief and get more Iranian oil on the market,” said John Kilduff, partner at Again Capital LLC in New York.

On Friday, the United States restored sanctions waivers allowing international nuclear cooperation with Iran on projects designed to make it harder for Iran’s nuclear sites to be used to develop weapons.

Another senior State Department official on Friday said the waiver was needed to permit technical discussions about reviving the deal but was not a signal that the United States was on the verge of reaching an agreement on its restoration.

Speaking on condition of anonymity, a European official said top envoys to the Vienna talks – which are indirect because Iran has so far refused to sit down with U.S. diplomats – were likely to meet on Tuesday in the Austrian capital.

“President (Joe) Biden still wants us to negotiate in Vienna … That’s a symbol or a sign of our continued belief that it is not a dead corpse, that we need to revive it because it is in our interest,” Rob Malley, U.S. envoy for Iran, told MSNBC Sunday night.

Iran’s foreign minister said on Saturday that a U.S. move to restore sanctions waivers to Tehran was not enough and Washington should provide guarantees for the revival of the 2015 nuclear deal with major powers.

Israeli Prime Minister Naftali Bennett said on Sunday he spoke with Biden and discussed ways to halt Iran’s nuclear program.

Oil complex eyes potential conclusion of U.S.-Iran nuclear talks

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