Oil futures rose Tuesday, finding support as traders watched economic data out of China and prepared for talks aimed at reviving the Iranian nuclear deal.
West Texas Intermediate crude for May delivery
the global benhmark, was up 95 cents, or 1.5%, at $63.10 a barrel on ICE Futures Europe.
Crude fell 4% Monday, with pressure tied to last week’s decision by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to relax output curbs. The plan would put more than 2 million barrels a day of production back on the market by July.
Analysts said talks in Vienna aimed at reviving the Iran nuclear pact, scheduled to begin Tuesday, have also been a headwind for crude. The talks are aimed at restoring the nuclear deal, which would lead to a lifting of U.S. sanctions that have curtailed Iranian crude exports.
“The U.S. and Iran won’t meet directly, but rather the Europeans will serve as go-betweens,” said Marshall Gittler, head of investment research at BDSwiss Holdings, in a note. “As the possibility of a breakthrough in the talks fade, the likelihood of a pick-up in exports from Iran fades too, removing one risk from the oil market.”
Meanwhile, the Caixin China Services purchasing managers index climbed to 54.3 in March, rebounding from a 10-month low of 51.5, Caixin Media Co. and research firm Markit said Tuesday. A figure above 50 indicates an expansion in activity.
Meanwhile, concerns over the supply implications of last week’s OPEC+ meeting will continue to hang over the market, analysts sad.
The move will “give rise to a renewed supply surplus on the oil market and would initially mean abandoning the declared objective of eliminating the surplus crude oil stocks,” wrote analysts at Commerzbank, in a note.