Oil prices rise as storm forms in Gulf, doubts emerge on Iran deal

[SINGAPORE] Oil prices rose on Monday as a storm formed in the Gulf of Mexico and Iran said a three-month nuclear monitoring deal had expired, raising doubts about the future of indirect talks that could end US sanctions on Iranian crude exports.

Brent crude oil futures for July rose 32 cents, or 0.5 per cent, to US$66.76 a barrel by 0143 GMT, while US West Texas Intermediate for July was at US$63.93 a barrel, up 35 cents, or 0.6 per cent.

Oil prices fell last week after Iran's president, Hassan Rouhani, said the United States was ready to lift sanctions on his country's oil, banking and shipping sectors.

"Iran's oil production has been rising in recent months, likely in anticipation of a lifting of the sanctions," ANZ analysts said in a note on Monday.

However, the speaker of Iran's parliament said on Sunday a three-month monitoring deal between Tehran and the UN nuclear watchdog had expired and that its access to images from inside some Iranian nuclear sites would cease.

European diplomats said last week that failure to agree an extension of the monitoring deal would plunge wider, indirect talks between Washington and Tehran on reviving the 2015 Iran nuclear deal into crisis. Those talks are due to resume in Vienna this week.

Former President Donald Trump withdrew the United States from the deal in 2018 and re-imposed sanctions.

Meanwhile, a low pressure system located over the western Gulf of Mexico with winds of 48 to 56 kmh near and east of the center, has a 60 per cent chance of becoming a cyclone in the next 48 hours, the US National Hurricane Center (NHC) said on Friday.

Concerns of rising coronavirus cases in Asia capped price gains.

REUTERS