LONDON: Oil prices edged higher on Friday as investors weighed cautious optimism over renewed United States-Iran peace efforts ahead of the long US Independence Day holiday weekend, although gains remained limited amid expectations of ample global crude supplies.
Market sentiment was supported by hopes that diplomatic engagement between Washington and Tehran could help ease geopolitical tensions in the Middle East. However, traders remained cautious as uncertainty over the outcome of the negotiations continued to limit stronger price gains.
The US holiday weekend also contributed to subdued trading activity, with many investors avoiding major positions ahead of lower market participation.
What is influencing the oil market?
Crude prices continue to be shaped by a combination of geopolitical developments, global demand expectations and supply outlooks.
Investors are closely monitoring diplomatic efforts between the United States and Iran, as any breakthrough could affect sanctions policy and future Iranian oil exports.
At the same time, concerns over sufficient global oil supplies and uncertainty surrounding demand growth have tempered bullish sentiment, preventing a sharper increase in prices.
Market participants are also awaiting further signals on production levels and broader economic conditions that could influence energy demand in the coming weeks.