Investing.com -- Crude futures surged on Tuesday ending a five-session losing streak, as Iran and a group of western powers extended a deadline for a comprehensive nuclear deal beyond the upcoming Fourth of July holiday this weekend.
On the New York Mercantile Exchange, WTI crude for August delivery jumped 1.11 or 1.90% to 59.44 a barrel, one day after touching down to a near monthly low. Texas Long Sweet futures traded in a broad range of 57.96 and 59.25, as traders covered shorts following the recent slide.
In spite of Tuesday's gains, WTI crude still finished June down slightly after opening the month above $60 a barrel. The sell-off erased nearly all of the gains from May when WTI crude rose considerably by 1.64%. WTI crude has been in a holding pattern between $57 and $63 a barrel since the end of April when it skyrocketed more than 23%. Crude futures rose more than 3% in February, before moving lower in March when they fell to a yearly-low at around $44 a barrel.
On the Intercontinental Exchange (ICE), brent for August delivery jumped more than 2% reaching a session-high of 63.82, before falling back slightly to 63.60. Brent futures also snapped a five-day losing streak on Tuesday. For the month, brent future declined by more than 2% after opening the month near $65 a barrel. The spread between the international and U.S. domestic benchmarks of crude stood at 4.16, above Monday's level of 3.68.
In Vienna, a U.S. State Department spokesperson said negotiations with Iran over its nuclear capabilities have been extended beyond Tuesday's deadline by seven days to July 7. The delays will provide the two sides with more time for negotiations to reach a long-term solution, State Department spokesperson Marie Harf said.
A comprehensive deal is viewed as bearish for crude, as Iran reportedly has approximately 30 million barrels ready for export shortly after severe economic sanctions are eased if an accord is reached. In addition, Facts Global Energy, an energy consulting firm, forecasts that Iranian oil exports could reach a level of 1.7 million barrels per day within 12 months after sanctions are lifted. When Iran and its negotiating partners announced the framework of a preliminary deal in April, Brent crude futures plunged more than 4% in the hours after the announcement.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained 0.65% to 95.70. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
While WTI crude futures are up 16% since the start of the year, they are still down approximately 50% since peaking above $105 last year at this time.