Oil climbed as the market assessed the risk of additional US sanctions on Russia and the chance that nuclear talks with Iran would fail to produce an agreement. West Texas Intermediate climbed more than 1% to approach $62 a barrel after President Donald Trump said Russian President Vladimir Putin was “playing with fire” by escalating attacks on Ukraine. The US is weighing additional sanctions on the country after aggressive measures against Russia’s oil industry earlier this year sent crude rallying past $80 a barrel. Elsewhere, the New York Times reported that Israeli Prime Minister Benjamin Netanyahu is pressing on with threats to disrupt talks between Washington and Tehran by striking the Iran’s nuclear facilities. A wrong turn in the negotiations stands to crimp flows from the OPEC member.
Still, bearish forces loom in the background. OPEC+ is gathering online to review production quotas for this year and next, before eight key members decide over the weekend whether to bolster output again in July. Members held preliminary talks last week on making a large production hike for a third consecutive month, according to delegates. The ramp-up of idled production by OPEC and its allies has stoked fears about oversupply and added to the pressure on prices. Parts of the futures curve for Brent are in contango — a bearish structure that signals ample supply. Oil has trended lower since mid-January, with sweeping tariffs from the Trump administration and retaliatory measures from targeted countries raising concerns of an economic slowdown. However, there has been some signs recently of easing trade tensions.