Oil prices rise on supply concerns and a weak dollar
Kyiv • UNN
Oil prices rose on concerns Iran may reject a U.S. proposal on a nuclear deal. A wildfire in Canada also led to the shutdown of oil production.
Oil prices rose on Tuesday amid supply concerns as Iran prepared to reject a US proposal for a nuclear deal that would be key to easing sanctions against a major oil producer, while a weaker dollar also supported prices, UNN reports citing Reuters.
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Brent crude futures rose 21 cents, or 0.32%, to $64.84 a barrel by 04:37 GMT (07:37 Kyiv time). US West Texas Intermediate crude rose 27 cents, or 0.43%, to $62.79 a barrel after rising about 1% earlier in the session.
The oil market rose sharply on Monday as rising geopolitical risks and an increase in supply from OPEC+, which fell short of expectations, provided impetus, ING analysts said in a note.
"Growth persisted in today's early trading," ING said on Tuesday.
Both brands rose nearly 3% in the previous session after OPEC+ agreed to maintain production growth in July at 411,000 barrels per day, which is less than some market participants feared, and corresponds to growth as in the previous two months.
"As the worst fears did not materialize, investors unwound their bearish positions formed before the weekend meeting," ANZ analysts said in a note.
Meanwhile, the dollar index, which measures its performance against six other major currencies, held near six-week lows as markets weighed the prospects of US President Donald Trump's customs policy and its potential danger to growth and inflation stimulus.
A weaker US currency makes dollar-denominated commodities such as oil less expensive for holders of other currencies.
"Crude oil prices continue to rise thanks to a weakening dollar," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Geopolitical tensions also supported prices. Iran was prepared to reject a US proposal to end a decade-long nuclear dispute, an Iranian diplomat said on Monday, saying the proposal failed to take into account Tehran's interests or ease Washington's position on uranium enrichment.
Iran ready to reject U.S. nuclear proposal as unfavorable - Reuters 02.06.25, 19:36 • 4456 views
If nuclear talks between the US and Iran fail, it could mean continued sanctions against Iran, which would limit supplies from Iran and support oil prices.
In addition, a forest fire in Alberta, Canada, has led to a temporary suspension of oil and gas production, which could reduce supplies.
Reuters estimates that forest fires in Canada have affected more than 344,000 barrels per day of oil sands production, or about 7% of the country's total crude oil production.