Record oil production meeting a wave of surprisingly strong demand has reined in world oil prices, creating a delicate balance that could be tipped either way—and the most immediate catalyst may be Iran's nuclear talks.
The market has been awaiting the outcome of the negotiations ahead of a June 30 deadline, as an agreement could put 1 million barrels of Iranian crude back on the market eventually. U.S. crude futures have been locked between $57 and $62 per barrel—since late April.
On Sunday, officials on all sides were quoted as saying the talks would need to continue beyond the deadline. Disagreement was reported to remain on inspections and other key issues.
A preliminary agreement was reached two months ago, but since then it had appeared not enough progress was made. The market had expected an extension.