NEW YORK (MarketWatch) — Oil futures retreated Tuesday as politicians appeared to make progress toward a deal to end Washington’s budget standoff and avert a default, while traders also focused on the first day of talks between Iran and major powers that could lead to an easing of sanctions against the country.
Nymex November crude-oil futures CLX3 -0.85% dropped 86 cents, or 0.8%, to $101.55 a barrel. ICE Brent crude UK:LCOX3 -0.87% lost 95 cents to trade at $110.09 a barrel.
The talks, which are to continue Wednesday in Geneva, mark the first full negotiations since Iranian President Hasan Rouhani was elected in June. The six powers earlier this year offered to ease some sanctions if Iran promised to suspend uranium-enrichment efforts and agreed to ship most of its enriched uranium out of the country.
But the negotiations “are still bearish for the crude oil market since the talks, if nothing else, stave off the timing of any U.S. and/or Israeli military action until at least next year,” they said in a note. While the odds of a satisfactory agreement with Iran aren’t high, “the talks themselves reduce the geopolitical risk premium for crude oil prices for the time being,” they wrote.
