OIL prices ended Wednesday (Aug 24) higher after a volatile trading session on concerns that the United States will not consider additional concessions to Iran in its response to a draft agreement that would restore Tehran’s nuclear deal - and potentially the Opec member’s crude exports.

Iran said it had received a response from the United States to the EU’s “final” text for the revival of Tehran’s 2015 nuclear deal with major powers.

Brent crude settled up US$1.00 to US$101.22 while US crude settled up US$1.15 to US$94.89 a barrel. Both benchmarks fell by more than US$1 earlier in the session.

Oil was also supported after Saudi Arabia suggested this week that the Organisation of the Petroleum Exporting Countries (Opec) could consider cutting output, though bearish economic signals from central bankers and falling equities weighed.

Both crude oil benchmark contracts touched 3-week highs earlier on Wednesday after the Saudi energy minister flagged the possibility of cutting production.

Opec sources later told Reuters that any cuts by the producer group and its allies, known collectively as Opec+, are likely to coincide with a return of Iranian oil to the market should Tehran secure a nuclear deal with world powers.

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A US official on Monday said that Iran had dropped some of its main demands in negotiations to resurrect a deal to rein in Tehran’s nuclear programme.

Opec+ is already producing 2.9 million barrels per day less than its target, sources said, complicating any decision on cuts or how to calculate the baseline for an output reduction.

“The oil price and supply outlook suggest that an Opec+ cut is not currently warranted,” PVM analyst Stephen Brennock said.

“Global oil supply could take a hit as peak US hurricane season approaches. Elsewhere, future supply outages in Libya cannot be discounted while Nigeria’s oil fortunes show little sign of improving.”

Earlier in the session oil prices fell after US government data showed lacklustre demand for petrol, which augurs for a notable slowdown in economic activity. Petrol demand data showed the 4-week average of daily petrol product supplied 7 per cent below the year-earlier period.

“The plummeting demand for petrol is dragging the market down,” said Andy Lipow, president of Lipow Oil Associates in Houston, Texas. REUTERS