Oil prices were up on Wednesday over fading concerns over potential resurgence in COVID-19 cases in China, which rises hopes for a stronger demand in the country, and declining prospects of an Iran deal.
International benchmark Brent crude was trading at $120.81 per barrel at 0651GMT for a 0.19% increase after closing the previous session at $120.57 a barrel.
American benchmark West Texas Intermediate (WTI) was at $119.81 per barrel at the same time for a 0.33% gain after the previous session closed at $119.41 a barrel.
Marathon talks between Iran and the US in Vienna to revive the 2015 deal, known as the Joint Comprehensive Plan of Action (JCPOA), are currently stalled due to key disagreements between Tehran and Washington.
The US blamed Iran for both sides' failure so far to reach an agreement on reviving the 2015 Iran nuclear deal, saying Iran's demands on sanctions-lifting were preventing progress.
'What we need is a willing partner in Iran. In particular, Iran would need to drop demands for sanctions lifting that clearly go beyond the JCPOA and that are now preventing us from concluding a deal,' a U.S. statement to a meeting of the U.N. nuclear watchdog's Board of Governors said.
Speaking at Baku Energy Week last week, Iranian Petroleum Minister Javad Owji had said his country plans to increase its crude oil production from 4 million barrels per day (bpd) to 6 bpd. Analysts say if the deal is signed, around 1 million bpd oil might be online in the market.
The World Bank warned on Tuesday that the global economy now faces a danger of stagflation not seen since the 1970s.
'This time it is facing high inflation and slow growth at the same time,' said David Malpass, the bank’s president.
The World Bank also sharply slashed its annual growth forecast for China, warning that COVID disruptions could further slow recovery in the world's second-largest economy.
However, recent efforts of the Chinese government to ease restrictions is rising hopes for a better oil demand in the country.
The OPEC+ ministers last week decided to add an extra 216,000 bpd to the market in July and August, however, the amount is far lower than the market expectation, which rises fears about tight supply and exerts upward pressure on prices.
By Sibel Morrow