LONDON, Sept 12 (Reuters): Oil prices rose on Monday as Iranian nuclear talks appeared to hit obstacles and an embargo on Russian oil shipments loomed, with tight supply struggling to meet still robust demand.
Brent crude futures rose 92 cents, or 1 per cent, to $93.76 a barrel by 0910 GMT. US West Texas Intermediate crude was up 71 cents at $87.50 a barrel, or 0.8 per cent.
Prices were little changed last week as gains from a nominal supply cut by the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, were offset by lockdowns in China, the world's top crude importer.
France, Britain and Germany on Saturday said they had "serious doubts" about Iran's intentions to revive a nuclear deal, in a development which might keep Iranian oil off the market and keep global supply tight, read more
Global oil prices may rebound towards the end of the year as supply is expected to tighten further when a European Union embargo on Russian oil take effect on Dec. 5.
The G7 will implement a price cap on Russian oil to limit Russia's lucrative oil export revenue following its invasion of Ukraine in February, and plans to take measures to ensure that the oil could still flow to emerging nations.
In more bearish news for markets, China's oil demand could contract for the first time in two decades this year as Beijing's zero-Covid policy keeps people at home during holidays and reduces fuel consumption.
"The lingering presence of headwinds from China's renewed virus restrictions and further moderation in global economic activities could still draw some reservations over a more sustained upside," said Jun Rong Yeap, market strategist at IG.
Also, the European Central Bank and the Federal Reserve are prepared to increase interest rates further to tackle inflation, which could lift the value of US dollar against currencies and make dollar-denominated oil more expensive for investors.
Meanwhile, the global oil demand is expected to increase over the third quarter to approximately 100.6 million barrels per day, according to a report on petroleum developments in global markets issued by the Organization of Arab Petroleum Exporting Countries.
This is in line with expectations that the Organisation for Economic Co-operation and Development group's demand would rise to about 47 million bpd, and the rest of the world's demand would rise to about 53.6 million bpd.
This is also despite the fact that preliminary estimates indicate global oil demand fell to about 98.3 million bpd during the second quarter, down by 1 per cent from the same period last year.
The report also revealed that OECD demand fell 0.7 per cent during the second quarter to about 45.5 million bpd, whereas the remainder of the world's demand fell 1.2 per cent to about 52.8 million bpd.
The monthly average price of OPEC crude oil fell to $108.32 per barrel in July 2022, about 8 per cent below the previous month.
OPEC has projected that in 2022 the common annual value of a basket of crude oil will rise to $105.71, an increase of 51.3 per cent over the previous year.
The report indicated that the common value of an OPEC crude oil basket reached $117.7 per barrel in June 2022, up 3.3 per cent compared with May 2022.
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