Oil prices steady at $90/bbl, Iran supply outlook adds pressure

Crude oil storage tanks are seen in an aerial photograph of the Cushing Oil Hub in Cushing, Oklahoma, U.S., April 21, 2020. REUTERS/Drone Base

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  • Iran nuclear talks resume Tuesday in Vienna
  • US production expected to reach 12 million bpd in 2022 – EIA
  • Macron calls for calm on the situation in Ukraine
  • API data shows US crude and fuel stocks falling

LONDON, Feb 9 (Reuters) – Oil prices were flat around $90 a barrel on Wednesday as the prospect of increased supply from Iran and the United States put pressure on the market.

Brent crude futures edged up 44 cents, or 0.5%, to $91.22 a barrel at 1504 GMT.

U.S. West Texas Intermediate crude rose 28 cents, or 0.3%, to $89.64 a barrel.

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Contracts fell about 2% on Tuesday as Washington resumed indirect talks with Iran to revive a nuclear deal.

A deal could lift US sanctions on Iranian oil and rapidly increase market supply, although a number of vital issues need to be addressed. Read more

“If the US-Iran talks continue to progress, this level should come under some pressure, while a breakdown in negotiations could be the catalyst that pushes the price into triple-digit territory,” said Craig Erlam, senior analyst at the market at OANDA.

Market sentiment was hit by the latest monthly report from the Energy Information Administration, which raised its outlook for U.S. crude production to 11.97 million bpd on average this year.

More data from the US EIA will be available at 10:30 a.m. EST (1530 GMT).

Additionally, industry concerns about geopolitical risks appeared to ease on Wednesday, several analysts said.

“Concerns about a further escalation of the Russian-Ukrainian conflict appear to have eased somewhat following the latest diplomatic efforts, which are reducing the risk premium on the price of oil,” said Carsten Fritsch, commodities analyst at Commerzbank. .

French President Emmanuel Macron said on Tuesday he believed steps could be taken to defuse the crisis after a meeting with Russian President Vladimir Putin and called on all parties to remain calm. Read more

The market got some support from bullish US inventory data.

U.S. inventories of crude, gasoline and distillates fell last week, market sources said, citing figures from the American Petroleum Institute on Tuesday.

Crude stocks fell 2 million barrels, according to API, while analysts had expected a 400,000-barrel increase.

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Additional reporting by Florence Tan in Singapore; Editing by Kirsten Donovan and Barbara Lewis

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