Oil prices ticked lower during Tuesday's Asian deals as markets assessed a mix of geopolitical tensions, soft economic signals from China, and strong physical demand in Asia.
By 3 pm AEST (5 am GMT), Brent crude futures for July delivery had slipped $0.23 or 0.3% to US$65.31 per barrel. US West Texas Intermediate (WTI) crude futures for July also declined, falling US$0.20 or 0.3% to US$61.94.
Traders focused on the prospect of a breakdown in nuclear talks between Washington and Tehran as Iran’s Deputy Foreign Minister Majid Takhtravanchi cautioned that talks would collapse if the United States maintained its demand for "zero enrichment" from Iran.
ANZ analysts observed rising diplomatic tensions, stating: "Rhetoric between the US and Iran has intensified in recent days. Iran’s Supreme Leader Ayatollah Ali Khamenei lashed out at Trump, accusing him of dishonesty and power abuse.
"President Pezeshkian said that Tehran won’t abandon its pursuit of civilian nuclear energy under any circumstance."
Meanwhile, a downgrade of the U.S. sovereign credit rating by Moody’s weighed on sentiment. The agency cut the U.S. rating by one notch on Friday, citing a ballooning federal debt of US$36 trillion, casting doubt over the fiscal health of the world’s largest energy consumer.
