June 8 (Reuters) – Oil prices edged lower on Thursday, but recovered from earlier losses after the US and Iran both denied reports they were close to a nuclear deal.
Oil fell more than $3 on reports that the US would give Iran sanctions relief to export oil in exchange for Tehran cutting uranium enrichment.
A White House National Security Council spokesman called the report “false and misleading.”
Brent crude fell 99 cents, or 1.3%, to $75.96 a barrel, while US West Texas Intermediate oil fell $1.24, or 1.7%, to $71.29.
“If there is no Iran deal, we will be back where we were before, more focused on fuel demand,” said John Kilduff, a partner at Again Capital LLC in New York.
Oil prices were previously lower after the US reported a larger-than-expected rise in gasoline inventories on Wednesday. That raised concerns about fuel demand in the US as the peak summer driving season is in full swing.
Demand concerns outweighed the prospect of tighter supply after Saudi Arabia pledged to cut crude oil production by 1 million barrels per day in July at an OPEC+ meeting over the weekend. That unilateral cut was in addition to the group’s broader deal to extend existing supply restrictions until 2024.
Oil prices could get a boost if the US Federal Reserve skips a rate hike at its next meeting on June 13-14, said Tamas Varga of PVM brokerage. Economists polled by Reuters do not expect an increase during the meeting.
The US dollar was slightly weaker on Thursday, making oil cheaper for buyers holding other currencies.
Reporting by Laura Sanicola; Additional reporting by Jeslyn Lerh; Edited by Chris Reese, Sharon Singleton and Lisa Shumaker