Oil gains premium on Iran news

The flow of news that progress has been made in talks between Western countries and Iran to reestablish the nuclear deal has caused oil prices to rise. Attention in the oil market has turned to the nuclear talks with Iran. News of progress in the talks has lifted oil prices from their lowest levels in six months. US crude oil rose above $87, while Brent oil tested above $93. US crude oil had fallen by more than 8 percent in the previous session due to concerns about a global recession. The long negotiations to revive the nuclear deal with Iran have made critical progress after the European Union put forward a concrete proposal to save the landmark agreement. Despite this, there are expectations in the market that no agreement will come out of the talks in the short term. US bank Goldman Sachs stated that an agreement is still not possible in the short term. Goldman analysts, including Callum Bruce, said in a report dated August 16 that a deal between Iran, the EU and the US is not expected to be reached in the near term, and even if it is, oil is unlikely to start flowing before next year. "Market sentiment remains largely negative on the prospect of an Iran nuclear deal as demand concerns persist," said Warren Patterson, head of ING commodity strategy.