Oil Steadies Near $91 With Focus Turning to Iran Nuclear Talks

(Bloomberg) -- Oil was steady in Asian trading near $91 a barrel as investor focus turned to the Iran nuclear talks that are set to resume on Tuesday.

Futures in New York fell 1.1% on Monday as a red-hot rally that’s propelled oil to the highest since 2014 took a breather. Confidence-building gestures by Washington and Tehran have sparked some optimism that the two sides are inching toward reviving a nuclear deal that would lead to a resumption of official crude exports from the Persian Gulf producer.

The U.S. gasoline market, meanwhile, may see further tightening after the nation’s second-biggest refinery unexpectedly shut along with other plants on the Gulf Coast. That could mean more pain at the pump for drivers, after the motor fuel rose to the highest in more than seven years last week.

The oil market has tightened this year on resurgent demand and a series of supply outages, putting $100 crude within reach and raising concerns about inflation. OPEC+ is struggling to meet its pledged output increases and Saudi Arabia has signaled its confidence in the outlook by boosting prices for March.

There’s also a geopolitical risk premium in the price as Russia amasses troops near its border with Ukraine, although President Vladimir Putin has said he has no plans to invade. U.S. President Joe Biden said Monday that the controversial Nord Stream 2 natural gas pipeline between Russia and Germany would be stopped if there was an invasion.

“A meaningful cooling in prices may not happen until there are more concrete signs of a breakthrough in the Ukraine crisis or the nuclear deal talks,” said Vandana Hari, the founder of Vanda Insights in Singapore. “If both happen concurrently, we could see a major sell-off.”

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Since diplomats last met in January, the U.S. has restored sanctions waivers that will allow countries to cooperate with Iran on civilian nuclear projects. Tehran closed down a controversial facility and consolidated production at internationally monitored sites.

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