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Oil Gains With More Nuclear Talks Planned as US Forces Gather

(Bloomberg) -- Oil rose as the US and Iran agreed to more nuclear talks next week following a round of discussions on Thursday, while a huge deployment of American forces in the Middle East kept the market on edge.

Brent traded above $71 a barrel after closing little changed on Thursday and West Texas Intermediate was near $66. Iran said recent talks in Geneva showed good progress, though a person familiar with the US position said the Americans left disappointed. The two sides agreed to meet next in Vienna.

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Some of the heat has come out of the oil market this week, but prices remain higher this year as concerns about a potential US strike on Iran help to offset broader glut expectations. Traders will be keenly watching a scheduled OPEC+ supply meeting on Sunday, as conflict risks cloud the outlook.

“There’s no new shock, and both escalation and diplomacy are still on the table,” said Haris Khurshid, chief investment officer at Karobaar Capital LP. “When probabilities are shifting but nothing physical has changed, crude tends to churn rather than trend.”

President Donald Trump has ordered the biggest military build-up in the Middle East since the second Gulf war in 2003 and threatened to strike Iran unless it makes a deal, though he’s signaled a preference for a diplomacy. Last week, Trump gave Tehran a deadline of 10-15 days to reach an agreement.

The US Navy has reduced staffing at its 5th Fleet headquarters in Bahrain to “mission critical” levels, according to Fox News, which said the same location was evacuated in a similar manner ahead of US strikes on Iran last June.