Oil dropped to trade near $90 a barrel, taking a breather from a rally that’s propelled crude to its highest since 2014.
Futures in New York fell as much as 1.7% on Monday after seven weekly gains in which oil’s gained 22%. Diplomats are set to return to Vienna Tuesday to resume Iran nuclear negotiations, which are viewed as a path to restore the nation’s sanctioned oil to global markets. On Friday, the U.S. signed several waivers related to Iran’s civilian nuclear activities to ease diplomatic efforts.
The potential for eventual Iranian barrels as well as crude being overbought from last week’s rally is prompting the market to take a “pause to refresh,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. Crude futures “had a really good run at a time when the broader economy is not performing that way.”
Meanwhile, Marathon Petroleum Corp.’s 593,000 barrel-a-day Galveston Bay refinery in Texas was shut after cold weather, and may take several weeks to run normally. Oil product markets surged after the news before paring gains, with heating oil margins climbing to their strongest since April 2020.
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