US affirms 'closer' than before on Iran Deal as Oil ends down after nearing 6-month low

New York: Crude oil prices closed down after nearing six-month lows on Monday as oil bulls feared that Iran might win back its stalled nuclear deal from global powers to pave its re-entry into the export market for oil.
Oil's slide from 14-year highs hit in March also prompted OPEC leader Saudi Arabia to hint at production cuts if the market kept tanking, Sputnik reported citing sources. "The paper and physical markets [for oil] are increasingly disconnected," Saudi Energy Minister Abdulaziz bin Salman said shortly after the benchmark for US crude came less than a dollar from revisiting Tuesday's low of under USD 86 per barrel.
Abdulaziz, who is chair of the 13-member organization of the petroleum exporting countries and its 10 allies led by Russia, said the extended OPEC+ group may need to "tighten output in order to stabilize the market."
OPEC+ has been raising production over the past year since slashing them from May 2020 in the aftermath of the coronavirus breakout that decimated demand for oil. While this year's production hikes were initially insulated by the Ukraine-invasion highs, OPEC+ has become more vulnerable since the market downturn that began in May, Sputnik stated citing sources.
In Monday's session, WTI settled down 54 cents, or 0.6 per cent, at USD 90.23 a barrel. It fell to as low as USD 86.30 earlier in the day. WTI is down almost 10 per cent since the start of August, extending the back-to-back loss of more than 7 per cent in July and June.
Brent, the London-traded global benchmark for crude, settled down 24 cents, or 0.3 per cent, at USD 96.48. Brent's session low was USD 92.37. Brent is down more than 12 per cent since the start of August, after a 6.5 per cent drop in July and a slide of more than 4 per cent in June.
Crude prices had their last monthly gain in May. Their biggest rally for the year was in March when WTI reached USD 130.50 while Brent almost touched USD 140 in the aftermath of the Ukraine conflict. Monday's drop in oil prices came amid renewed momentum for reports from last week suggesting that Iran and the European Union were close to reviving a 2015 nuclear deal for Tehran that would lift White House sanctions on the Islamic Republic's oil.
The US State Department, responding to the speculation, confirmed in a statement on Monday that Washington and Tehran were closing in on a deal.
"A nuclear agreement is now closer than it was two weeks ago," the department said, adding, however, that "there are still issues that need to be resolved" in getting Iran back on the path of nuclear non-proliferation and legitimizing its oil exports.
The State Department's response came after news outlet Axios reported earlier on Monday that the White House seemed to be back-pedalling on giving the nuclear deal seeing a new phase of life, apparently to appease growing Israeli discontent over the matter, Sputnik reported.
Israel, dismayed by the increasing possibility that its arch-rival Iran will reap billions of dollars in cash and oil from the deal to pose new terror threats to Jerusalem, is pressuring the United States not to okay the agreement, Axios reported.
The State Department denied any insinuation that it was hampering a successful outcome of the talks. "The idea that the US has slowed the Iran nuclear deal negotiations in any way is false," it said.
The department also said it was encouraged by Iran's dropping of the demand for the lifting of the terrorism designation that had been placed on the IRGC, or the Islamic Revolutionary Guard Corps.
The IRGC, Tehran's elite security force, has been blamed by the United States and Israel for many terror acts around the world. According to a CNN report on Friday, Iran has dropped its demand that the US stop listing the IRGC as a terrorist organization under the State Department's watchlist. That demand has been one of Iran's sticking points that have held up the reinstatement of the 2015 nuclear deal. (ANI)