Houston — Oil prices rebounded on Friday as U.S. buyers were filling inventories ahead of the three-day Memorial Day weekend amid worries over the latest round of nuclear talks between American and Iranian negotiators.
Brent crude futures rose 54 cents, or 0.84%, to $64.98 a barrel by 1600 GMT. U.S. West Texas Intermediate crude futures were up 39 cents, or 0.64%, at $61.59.
In earlier trading futures had dropped by 1% as they headed to the first weekly decline in three weeks after U.S. President Donald Trump on Friday recommended a 50% tariff on the European Union and expectations rose that OPEC+ will increase crude output further in July.
“I think there is some short-covering going into this weekend,” said Phil Flynn, senior analyst with Price Futures Group.
The Memorial Day weekend kicks off the U.S. summer driving season, the period of highest demand for motor fuels.
U.S. and Iranian negotiators met in Rome on Friday in another round of talks aimed at curtailing the Islamic Republic’s nuclear program. Traders are afraid crude supplies could be interrupted if talks fail to reach a deal, Flynn said.
“The talks are not looking good,” he said. “If these are the last talks and there’s no deal, it could give a green light to the Israelis to attack Iran.”
President Trump said on Friday that he is recommending a straight 50% tariff on goods from the EU starting on June 1, saying the bloc has been hard to deal with on trade.
“The tariff threats versus the European Union, an important trading partner of the U.S., supports renewed economic slowdown concerns,” said UBS analyst Giovanni Staunovo.
Meanwhile, the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and allies led by Russia is holding meetings next week expected to yield another output increase of 411,000 barrels per day (bpd) for July.
Reuters reported this month that the group could unwind the rest of its 2.2 million bpd voluntary production cut by the end of October, having already raised output targets by about 1 million bpd for April, May and June.
Reporting by Erwin Seba in Houston; Additional reporting by Ahmad Ghaddar, Siyi Liu Editing by Susan Fenton, David Goodman and Deepa Babington – Reuters
