Oil drops nearly 3% on signs of progress in US Iran talks, demands fear

By Stephanie Kelly New York (Reuters) oil prices on Monday dropped almost 3% on signs of advances in US -Iran talks, while investors were concerned about economic winds of rates that could combat the demand for fuel. Brent -Ru futures were $ 1.93, or 2.8%, at $ 66.03 a barrel at 12:49 EDT (1448 GMT), after closing 3.2% on Thursday. The US Western Texas -Intermediate rough dropped $ 1.69, or 2.6%, to $ 62.99 a barrel after setting up 3.54% in the previous session. On Thursday, the last settlement day was last week due to the Good Friday holidays. “The US Iran talks look relatively positive, which allows people to think about the possibility of a solution,” says Harry Tchilinguirian, group head of research at Onyx Capital Group. “The immediate implication would be that Iranian RU would not be off the market.” Markets also have a lower liquidity due to the Easter holidays, which could aggravate the price movements, he added. In the talks, the US and Iran agreed to draw up a framework for a possible nuclear deal, Iran’s foreign minister said, after discussions that a US official described as “very good progress”. The progress follows further sanctions by the US last week against a Chinese independent oil refinery that he claims that the Iranian crude oil has been processed, which increases pressure on Tehran. Markets also came under tensions on Monday after US President Donald Trump repeated criticism of the Federal Reserve. The US economy could delay unless interest rates are reduced immediately, President Donald Trump said on Monday. Gold prices have risen to another record, with jitters wrinkling in energy markets due to concerns about the demand, according to analysts. Wall Street’s most important indices have lost more than 1% each. [.N] Phil Flynn, senior analyst at Price Futures Group, says the risk-off feel in the market due to stocks. Meanwhile, OPEC is expected to increase major producers, including the organization of the countries of Petroleum exports and allies such as Russia, will increase production by 411,000 barrels per day from May. However, some of the increase can be counteracted by cuts of countries that have exceeded their quotas. In a Reuters poll on April 17, investors believe that the tariff policy will cause a significant slowdown in the US economy this year, with the median probability that the recession approaches 50%in the next 12 months. The US is the largest oil consumer in the world. Investors are stopping for several US exemptions this week, including PMI of April flash making and services, for direction on the economy. “The series of PMI exemptions of this week can further underline the economic impact of rates, with both manufacturing and services conditions in the most important economies expected to soften,” Ig’s Yeap said. (Reporting by Stephanie Kelly in New York; Additional Reporting by Anna Hirtenstein in London, Florence Tan and Trixie Yap in Singapore; Editing by Kate Mayberry, Chizu Nomiyama, Kirsten Donovan and Jan Harvey) first: April 21, 2025, 10:33 pm