By Peter Nurse
Investing.com -- Oil prices stabilized Tuesday after the previous session’s sharp losses while traders monitored talks on a reviving deal that could allow more Iranian oil exports.
By 09:05 ET (13:05 GMT), U.S. crude futures traded 0.3% lower at $89.14 a barrel, while the Brent contract fell 0.4% to $94.67. Both benchmarks fell around 3% in the previous session.
U.S. Gasoline RBOB Futures were flat at $2.9520 a gallon.
The crude oil market continues to trade near its 2022 lows on concerns of a global recession, especially following disappointing economic data from China, the biggest crude importer in the world.
A lot of the focus Tuesday has been on the talks between the European Union and Iran over the revival of the 2015 nuclear deal, which could result in the return of Iranian oil to the world market.
The EU sent what it described as a "final" offer to Iran earlier this month, after 16 months of fitful talks, and said it had seen ‘nothing alarming’ in Iran’s response to the plan, received late on Monday.
"For the moment, we are studying it and we are consulting with the other JCPOA participants and the U.S. on the way forward," an EU spokesperson said Tuesday, referring to the nuclear deal by the official abbreviation JCPOA.
Approval by the EU raises the chance of the Biden administration also accepting it – subject to the usual caveats of U.S. politics.
“A revival of the deal and lifting of oil sanctions could potentially see Iran increasing oil supply in the region of 1.3MMbbls/d over time,” said analysts at ING, in a note, “which would help to ease some of the expected tightness in the oil market over 2H23.”
Aside from the Iranian decision, market participants also await industry data on U.S. crude stockpiles, due later Tuesday, with oil and gasoline stockpiles expected to have fallen last week.
“While the short term outlook appears more negative, the longer term outlook is still somewhat constructive,” ING added. “U.S. drilling activity is increasing, although the pace has been slower than we have seen in previous upcycles.”