Oil prices climb as U.S. official reportedly raises doubt that Iran will comply with nuclear commitments

However, Reuters reported that on Sunday, the U.S. Secretary of State Antony Blinken said the U.S. hasn’t yet seen whether Iran will move to comply with its nuclear commitments to have sanctions removed.

Talks between Iran and world powers have been ongoing, with reports of some progress.

“Any delay on sanctions lifting on Iran would be another bullish factor in a market that may need Iranian barrels to meet demand later this year,” said Flynn, in a daily report.

West Texas Intermediate crude for July delivery CL00, +3.62% CLN21, +3.62% rose $1.58, or 2.5%, to $65.16 a barrel on the New York Mercantile Exchange. July Brent crude BRNN21, +2.98%, the global benchmark, was up $1.53, or 2.3%, at $67.97 a barrel on ICE Futures Europe.

Iran informed the U.N. nuclear watchdog that it would extend a monitoring deal for a month, the International Atomic Energy Agency said Monday, according to news reports. The leader of Iran’s parliament on Sunday had announced that the monitoring agreement had lapsed, raising doubts about efforts to revive the Iran nuclear deal.

Indirect talks aimed at returning the U.S. to the nuclear accord and Tehran moving back into compliance with the deal have shadowed the oil market. An agreement would see the lifting of U.S. sanctions on Iran, returning a large source of crude supply to the market.

“If and when the U.S. rejoins the Iranian nuclear deal, this will likely hit sentiment in the oil market, however we are still of the view that the market will be able to absorb this additional supply, so would expect price weakness to be short-lived,” said Warren Patterson, head of commodities strategy at ING, in a note.

Oil futures also took a cue from a positive tone for equities and a softer U.S. dollar.

“Stocks are in green as risk appetite remains dominant on markets. Moreover, the U.S. dollar is declining,” said Carlo Alberto De Casa, chief analyst at ActivTrades, in a note. “All this is creating the perfect environment for oil, with both the WTI and Brent benchmarks gaining over 1%. Despite some temporary corrections the main trend still appears positive.”

U.S. benchmark stock indexes traded higher in Monday dealings after the Dow Jones Industrial Average DJIA, +0.61% and the S&P 500 SPX, +1.05% logged back-to-back weekly declines.

The ICE U.S. Dollar Index DXY, -0.15%, which tracks the currency against a basket of six major rivals, was off 0.3%. A weaker dollar can be beneficial to commodities priced in the currency by making them less expensive to users of other monetary units.

Back on Nymex, June gasoline RBM21, +1.95% tacked on 1.3% to $2.10 a gallon and June heating oil HOM21, +2.59% rose 1.9% to $2.03 a gallon.

June natural gas NGM21, -0.79% traded at $2.87 per million British thermal units, down 1.1%.