U. S. oil prices climbed Thursday, snapping a five-session losing streak, as expectations of higher Iranian crude-oil exports receded.
Nuclear talks between Iran and six world powers are appear likely to drag on past Thursday's midnight deadline. If a deal isn't complete by Friday morning, Congress will get an extra month to review the deal.
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The prospect of a final deal has weighed on oil prices in recent months. If a deal is reached, sanctions currently limiting Iran's oil exports would eventually be lifted, allowing the nation to sell more oil to the already-oversupplied global market.
Light, sweet crude for August delivery settled up $1.13, or 2.2%, at $52.78 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.56, or 2.7%, to $58.61 a barrel on ICE Futures Europe.
Oil prices fell sharply earlier this week amid concerns about gyrations in the Chinese stock markets, an economic crisis in Greece and the continued oversupply of crude oil. U.S. inventory data released Wednesday showed an unexpected increase in domestic crude supplies, sending the U.S. benchmark price of oil to a three-month low.
"Without the threat of sharply higher Iranian exports, the market's likely to regain the week's losses," said Mansfield Oil Co. in a note.
A rebound in the Chinese stock market also boosted oil prices. A selloff in Chinese equities had spurred concerns about economic growth in the No. 2 oil-consuming nation. Measures deployed by the Chinese government, including trading suspensions and cheap financing, restored some stability after several weeks of heavy losses.
"We've got to see if China can stop the hemorrhaging in their equity markets," said Bill O'Grady, chief market strategist at Confluence Investment Management. "If they're unsuccessful in doing that, my hunch is you've got more downside in oil."
The International Energy Agency's closely watched monthly report is scheduled to be released Friday, along with fresh data on the number of rigs drilling for oil in the U.S.
Gasoline futures settled up 4.61 cents, or 2.3%, at $2.0451 a gallon. Diesel futures rose 2.08 cents, or 1.2%, to $1.7360 a gallon.
(By Nicole Friedman)