By Jessica Resnick-Ault
NEW YORK (Reuters) – Oil prices soared on Monday, with gains amid a pause in negotiations to end US sanctions on Iran’s commodity and with the dollar retreating from a two-month high.
Brent crude for August gained $1.39, or 1.9% to close at $74.90 a barrel. US crude oil (WTI) for July gained $2.02, or 2.8%, to close at $73.66.
Both benchmark brands have advanced in the past four weeks with optimism for the pace of Covid-19 vaccinations around the world and expectations of back travel in the summer in the Northern Hemisphere. The rally boosted oil surcharges in Asia and Europe to multi-month highs.
Bank of America said Brent oil would likely average $68 a barrel this year, but could hit $100 next year, with pent-up demand and more private car use returning.
Oil was also boosted by the weaker US dollar, which could send investors speculating on dollar-priced assets such as commodities.
Negotiations to return to Iran’s nuclear deal came to a halt on Sunday after hard-line judge Ebrahim Raisi won the presidential election.
A deal could lead Iran to export a surplus of 1 million barrels a day, or 1% of world supply, for more than six months of its inventory capacities.
(By Noah Browning and Florence Tan)
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