Oil prices rose on Monday, reversing earlier losses, as investors kept bullish sentiment on expectations that global supply would remain tight as demand picks up and shrugged off signs of progress in the US-Iran nuclear talks.
"Investors scooped up short-term profits on the news suggesting progress in the US-Iran nuclear talks, but fresh buying kicked in again after the technical corrections as global supply is expected to stay tight," said Tatsufumi Okoshi, a senior economist at Nomura Securities.
US President Joe Biden's administration on Friday restored sanctions waivers to Iran to allow international nuclear cooperation projects, as the talks on the 2015 international nuclear deal enter the final stretch.
If the United States lifts sanctions on Iran, the country could boost oil shipments, adding to global supply.
Brent crude was up 60 cents, or 0.6 per cent, at $93.87 a barrel as of 0152 GMT, after touching its highest since October 3, 2014 of $94.00 earlier. It slid to as low as $92.47 in an early trade.
US West Texas Intermediate crude climbed 25 cents, or 0.3 per cent, to $92.56 a barrel, near its 7-year high hit on Friday, having fallen to as low as $91.36 earlier in the session.
Both benchmarks rose more than $2 on Friday, extending their rally into a seventh week on ongoing worries about supply disruptions fuelled by political turmoil among major world producers.
"Investors expect more twists and turns in the US-Iranian talks and no agreement to be reached anytime soon," said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
"The market tone remained bullish, with investment bankers predicting Brent hitting $100 a barrel and global supply continuing to be tight with OPEC+ not reaching their output targets and the United States not raising output much," he said.
Crude prices, which have already rallied about 20 per cent this year, are likely to surpass $100 per barrel because of strong global demand, analysts have said.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, are struggling to meet targets despite pressure from top consumers to raise production more quickly.
Also in the United States, even though the rig count has climbed for a record 18 months in a row, oil production is still far from pre-pandemic record levels.
Fuelling supply concerns, tensions remain high in Eastern Europe, with White House national security adviser Jake Sullivan saying on Sunday that Russia could invade Ukraine within days or weeks but could still opt for a diplomatic path.
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