Oil prices increased on Monday as Iran nuclear talks appeared to face stumbling blocks and an embargo on Russian oil exports loomed, with limited supply struggling to satisfy still-vigorous demand.
By 0910 GMT, Brent crude futures had risen 92 cents, or 1%, to $93.76 per barrel. West Texas Intermediate crude in the United States went up 71 cents, or 0.8%, to $87.50 per barrel.
Last week, gains from a nominal supply cut by the Organization of Petroleum Exporting Countries and allies, including Russia, known as OPEC+, were countered by lockdowns in China, the world’s largest petroleum importer.
France, Britain, and Germany stated on Saturday that they have “serious reservations” about Iran’s intentions to restart a nuclear deal, a move that could keep Iranian oil off the market and global supply tight.
Global oil prices may rise at the end of the year as supply is likely to tighten further with the implementation of a European Union ban on Russian oil on December 5.
The G7 will impose a price ceiling on Russian oil in order to curtail Russia’s lucrative oil export revenue following its invasion of Ukraine in February, and will take steps to ensure that the oil continues to flow to developing countries.
In other pessimistic market news, China’s oil demand may fall for the first time in two decades this year as Beijing’s zero-COVID policy keeps people from home during the holidays and decreases fuel usage.
‘The remaining presence of headwinds from China’s strengthened virus restrictions, as well as additional slowing in global economic activity, could potentially raise some doubts about a more prolonged upswing,’ said Jun Rong Yeap, market strategist at IG.
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