Oil Retreats as Investors Await Iran Nuclear Talks
A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo
Oil pulled back after hitting fresh multi-year highs on Monday, as investors awaited the outcome of this week's talks between Iran and world powers over a nuclear deal that is expected to boost crude supplies.
Brent crude futures for August fell 66 cents, or 0.9%, to $71.23 a barrel by 0645 GMT, after earlier hitting $72.27, their highest since May 2019. US West Texas Intermediate crude for July touched $70 for the first time since October 2018 but reversed course to be at $69.10 a barrel, down 52 cents, or 0.8%.
Investors may have sold off some contracts to take profit when WTI hit $70, said Avtar Sandu, a senior commodities manager at Phillips Futures in Singapore.
"The primary concern is about Iranian barrels coming back into the market but I don't think there will be a deal before the Iranian presidential election," he added.
Data showing a 14.6% year-on-year drop in China's crude oil imports in May on Monday also weighed on prices.
However, Brent and WTI have risen for the past two weeks as fuel demand is rebounding in the United States and Europe after governments loosened COVID-19 restrictions ahead of summer travel.
Global oil demand is expected to exceed supplies in the second half despite a gradual easing of supply cuts by OPEC+ producers, analysts say.
A slowdown in talks between Iran and global powers in reviving a 2015 nuclear deal and a drop in US rig count also supported oil prices.
Iran and global powers will enter a fifth round of talks on June 10 in Vienna that could include Washington lifting economic sanctions on Iranian oil exports.
While the European Union envoy coordinating the negotiations had said he believed a deal would be struck at this week's talks, other senior diplomats have said the most difficult decisions still lie ahead.
Asian Stocks Take another Hit from AI, Mideast Worries
Seoul's Kospi, which has hit multiple records this year as it led Asian markets higher, tumbled Friday. Jung Yeon-je/ AFP
Asian equities went into reverse Friday on continued worries about the AI trade after disappointing forecasts from chip titan Broadcom, while investors were also keeping a wary eye on stuttering Middle East peace efforts.
After leading several markets to record highs this year, technology firms are facing selling pressure on concerns that the eye-watering sums pumped into artificial intelligence may have been overdone and stock valuations are too high.
Broadcom on Wednesday sparked concern among traders who have piled into all things AI when its revenue forecast for the third quarter came in below expectations, sparking a sell-off in Wall Street's Nasdaq as dealers took profits and rotated into other sectors.
And the losses have bled through to Asia, where tech-heavy Seoul and Tokyo -- which have led the region's surge this year -- sank from record highs.
South Korean stocks tanked almost seven percent at one point Friday, having dropped 1.8 percent the day before. The Nikkei in Tokyo was off more than one percent, matching Thursday's retreat.
The losses come as investors contemplate a coming IPO by Elon Musk's SpaceX, which is aiming to raise $75 billion in the biggest initial public offering ever. The company said in a regulatory filing that it would offer more than 550 million shares at $135 each next week, which could value the company at $1.8 trillion.
There were also losses in Hong Kong, Sydney, Singapore and Taipei, though Shanghai, Wellington and Manila edged up.
Jakarta extended losses amid building fears about the state of the Indonesian economy and the rupiah, which have been hammered by surging oil prices.
"Broadcom's revenue miss sparked profit-taking across the semiconductor sector and gave investors a reason to pause after the recent AI-driven rally," said City Index's Fiona Cincotta.
"Broadcom's results suggest investor expectations may have run ahead of fundamentals."
The latest AI wobble came as investors grew nervous about grinding efforts to end the Middle East crisis.
The head of militant group Hezbollah on Thursday rejected a conditional truce announced by Lebanon and Israel, demanding a comprehensive ceasefire and full Israeli withdrawal from its northern neighbor.
Naim Qassem's message came after the two sides agreed to a conditional ceasefire that Lebanon's president called the "last chance" for a durable end to the fighting.
Talks between Iran and the United States also appeared to be going nowhere, with Iran reporting "no tangible progress", even as President Donald Trump again voiced optimism, telling reporters a deal "could happen... over the weekend".
Still, oil prices held their recent losses amid lingering optimism a deal will be struck and the Strait of Hormuz -- through which a fifth of global oil usually passes -- will reopen.
Official US jobs data due later in the day are also in focus following forecast-topping private data that indicated the economy remained healthy and fanned bets on the Federal Reserve hiking interest rates.
UK House Prices Fall Unexpectedly as Market Feels Iran War Impacthttps://english.aawsat.com/business/5280658-uk-house-prices-fall-unexpectedly-market-feels-iran-war-impact
A banner advertising new houses for sale a seen on a new housing development under construction in Partington, Britain June 1, 2023. REUTERS/Phil Noble
UK House Prices Fall Unexpectedly as Market Feels Iran War Impact
A banner advertising new houses for sale a seen on a new housing development under construction in Partington, Britain June 1, 2023. REUTERS/Phil Noble
British house prices unexpectedly fell in May, according to data from mortgage lender Halifax on Friday, which represented the latest sign of a cooling in the market as higher borrowing costs and uncertainty caused by the Iran war weigh on demand.
House prices fell by a monthly 0.1% in May, the same as in April, representing the third consecutive month-on-month fall, Reuters quoted Halifax as saying. A Reuters poll of economists had pointed to a rise of 0.1% on the month.
"Property price trends continue to reflect the uncertainty linked to developments in the Middle East," said Amanda Bryden, head of mortgages at Halifax.
"Despite recent cuts to mortgage rates, higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers and temper demand."
Compared to a year ago, prices were 0.5% higher, well below the 1.0% rise forecast in the poll.
The survey chimed with findings from rival mortgage lender Nationwide, which in May recorded the first monthly fall since the start of the Iran war.
Data from the Royal Institution of Chartered Surveyors also showed a drop in house prices and demand in April.
Average mortgage rates in Britain have climbed by almost a full percentage point since the start of the US-Israeli war on Iran. The conflict also means that financial markets now expect the Bank of England to raise interest rates later this year, rather than cut them.
Investors currently price in one or possibly two quarter-point rate rises by the BoE by the end of 2026, but see only around an 11% chance of a move on June 18 after the central bank's next meeting.
Despite the higher borrowing costs, lenders approved the most mortgages in 15 months in April, according to data from the BoE on Tuesday.
Saudi Energy Minister Says Kingdom Remains Reliable, Flexible Supplierhttps://english.aawsat.com/business/5280546-saudi-energy-minister-says-kingdom-remains-reliable-flexible-supplier
Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
Saudi Energy Minister Says Kingdom Remains Reliable, Flexible Supplier
Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
Saudi Energy Minister Prince Abdulaziz bin Salman seized the spotlight at a high-level dialogue session held during the 2026 St. Petersburg International Economic Forum, breaking a strategic silence that had become a focus of questions and a gauge for global market expectations.
Speaking on Thursday, he delivered carefully calibrated messages to the energy sector, stressing that the world urgently needs stability in energy markets and declaring with confidence that the Kingdom is a flexible energy supplier, was, and will remain so under all circumstances.
In his remarks during a special session at the forum, where the Kingdom is taking part as “main guest of honor” as the two countries mark the centenary of diplomatic relations, Prince Abdulaziz acknowledged that current geopolitical events in the Middle East were distracting attention and obstructing focus on Saudi Arabia’s strategic priorities, foremost among them the goals of Vision 2030.
He described the situation as a source of considerable frustration.
Even so, he sent a strong message of reassurance to global markets, saying in a firm tone that it was their duty, and that of every Saudi citizen, to defy this difficult environment and continue to pursue their ambitions.
The Kingdom has the capability and confidence to address challenges and demonstrate its economic and operational resilience, he added.
He pointed to what he described as the success of Saudi Arabia’s infrastructure and logistics system in turning tragedies into opportunities, and in managing the Hajj season with unprecedented success despite the surrounding regional turmoil.
On the partnership with Moscow, the Saudi Energy Minister announced the signing of 30 new cooperation agreements between the private sectors in the two countries across fields including industry, education, tourism, and energy.
Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman al-Saud attends the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg on June 4, 2026. (Photo by Olga MALTSEVA / AFP)
Prince Abdulaziz said the Kingdom will sign agreements across various fields and that there are no limits or restrictions on joint cooperation.
He added that the strategic mindset in Riyadh and Moscow had moved beyond being merely “producers of oil or gas” to “manufacturing and supplying energy in its comprehensive sense,” including hydrocarbons and the export of electrons.
In an explanation of his earlier position, which had kept oil traders on edge, Prince Abdulaziz said he had deliberately remained silent during the period that witnessed one of the most severe global energy crises.
A minister is required to maintain his composure and not panic, because panic makes a person lose control of the narrative, he explained.
He moved on to express his intention to maintain silence, because silence amid many unknowns is a message and a humble acknowledgment that reality is changing quickly, and is a form of respect for oneself and for others.
He concluded his assessment of current market conditions with a pointed remark reflecting the scale of uncertainty clouding the global scene.
“The situation we’re going through now does make a point here, which is the world needs every molecule of energy, and every form of stabilization to this energy, because without energy security, you will lose sustainability,” the Saudi minister said.
“There are so many moving parts, there are so many unknowns, there are things that you think have become a reality, but then you wake up in the next morning and the reality is no longer a reality.”
Novak says the market faces a 12 million barrel shortfall
For his part, Russian Deputy Prime Minister Alexander Novak described the current crisis in the international oil market as unprecedented, with no parallel even in the 20th century.
Novak said Russia would deal with the Western sanctions imposed on it with flexibility and complete calm, given its position as a key supplier of energy resources to the international market.
He warned of a large, hidden shortfall in global supply, estimated at about 12 million barrels per day that are currently not reaching the market.
He said global markets had not yet felt the full impact of the energy crisis caused by the Middle East conflict because the situation was being managed through withdrawals from surplus reserve inventories.
Novak cautioned that if the conflict continues and Gulf states delay increasing production, the market will face an acute and immediate physical shortage of supplies within a few months.
In his analysis of the producers’ alliance, Novak stressed that the OPEC+ agreement remains a key driver of energy market direction.
He said its members control more than 50% of global production and more than 40% of total exports, adding that the agreements have proven highly efficient at curbing volatility and reducing market fluctuations.
Novak said current data gave countries an opportunity to accelerate compliance, describing the existing approach as a “standard and normal course” that allows countries that had previously exceeded their quotas for any reason to implement compensation plans for their earlier overproduction more quickly.
On Russia, Novak said technical analytical calculations to determine Russia’s maximum production ceiling are continuing in cooperation with the companies concerned, and would be discussed with partners by the end of 2026.
He expected Moscow to effectively reach its assigned production levels this year under the agreed quotas, despite current output being slightly lower than at the start of the year because several refineries were undergoing “emergency and unscheduled maintenance.”
Expectations of strong demand
OPEC Secretary General Haitham Al Ghais said the organization expects robust oil demand growth and would not change its estimates despite the conflict in the Middle East and the closure of the Strait of Hormuz.
“Despite all the commentary out there that oil demand is declining, we have not registered signs of that yet,” Al Ghais said.
“We still see robust demand growth at 1.2 million barrels a day for this year,” he said.
He also said investment in the oil sector should not be affected by "one-off events" that may occur anywhere in the world.
Egyptian Minister of Petroleum and Mineral Resources Karim Badawi told the session that renewable energy is a top priority to reduce dependence on natural gas. He said Egypt is working hard to increase electricity generation from wind and hydropower to secure a sustainable energy mix.
Markets hold their breath before the Sunday marathon
The remarks made at the forum on Thursday carry major significance as a prelude and practical indicator of the direction of leading producers ahead of decisive oil-related meetings next Sunday.
That day will see three consecutive meetings, beginning with OPEC’s administrative conference, followed by the 66th meeting of the Joint Ministerial Monitoring Committee, or JMMC, which is responsible for monitoring compliance levels, consensus, and the approval of current compensation plans.
Investors are closely watching the 41st ministerial meeting of the OPEC+ alliance. Informed sources said the alliance is likely to approve an additional gradual increase in its targets for next July.
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