Oil Prices Drop 2% on U.S.-Iran Nuclear Deal Hopes; Gold Climbs 1%

# Dollar Weakness and Soft Economic Data Propel Gold Prices SYDNEY—Oil prices plummeted by more than 2% on May 15 (local time) amidst hopes for a nuclear deal between the U.S. and Iran. In contrast, gold prices ascended by 1%, driven by weaker-than-anticipated U.S. economic data and a declining dollar. June West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange (NYMEX) dropped $1.53, or 2.42%, settling at $61.62 per barrel. Concurrently, Brent crude futures for July delivery on the London ICE Futures Exchange fell $1.56, or 2.36%, closing at $64.53 per barrel. President Donald Trump announced that the U.S. and Iran were nearing a nuclear deal, with Iran agreeing to certain conditions. A senior Iranian official confirmed on NBC News the previous day that Iran is prepared to reach an agreement, contingent on the lifting of economic sanctions. SEB analyst Ola Hvalbye indicated that lifting sanctions could introduce an additional 800,000 barrels per day of Iranian crude oil to the global market, exerting downward pressure on oil prices. # New Sanctions on Iran Amid Diplomatic Progress The U.S. Treasury unveiled new sanctions targeting Iran's production of ballistic missile components. Additionally, sanctions were imposed on around 20 companies engaged in a longstanding network exporting Iranian crude oil to China. These measures followed the fourth round of talks between the U.S. and Iran in Oman, aimed at resolving nuclear program disagreements. Global Risk Management Senior Analyst Arne Lohmann Rasmussen noted, "In less than 24 hours, the U.S. imposed new sanctions; however, market sentiment shifted on speculation of a diplomatic breakthrough.” He mentioned that an agreement, in line with OPEC+ production increases, could result in substantial oversupply in the latter half of the year. Vikas Dwivedi, Global Oil and Gas Strategist at Macquarie, commented that Trump seeks lower oil prices and is pushing for a deal with Iran, with discussions expected to finalize within the year. He predicted that the deal might add 200,000 to 300,000 barrels per day to oil supply, highlighting that Iran's crude exports had already risen to approximately 1.7 million barrels per day in April. Meanwhile, Russian President Vladimir Putin declined a proposal to meet Ukrainian President Volodymyr Zelensky for peace talks in Türkiye, slightly tempering the decline in oil prices. # IEA Revises Oil Demand Outlook The International Energy Agency (IEA) marginally revised its 2025 oil demand growth outlook, increasing it by 20,000 barrels per day to 740,000 barrels per day. However, the IEA expects the demand growth for the rest of this year to decrease to 650,000 barrels per day, a steep drop from nearly 1 million barrels per day in Q1. This slowdown is attributed to macroeconomic challenges and the surge in electric vehicle sales, stated the agency. # Gold Prices Surge on Weak U.S. Data and Falling Dollar Gold prices increased by over 1% amid weaker-than-expected U.S. economic data and a weakening dollar. President Putin's decision to forego Türkiye-led peace talks also boosted safe-haven gold. June gold futures on the New York Commodity Exchange (COMEX) rose 1.2% to $3,226.60 per troy ounce, while spot gold edged up 1.3% to $3,218.89 as of 2:51 a.m. KST on May 16. The dollar index, which gauges the U.S. currency against six major currencies, fell 0.1% on the day. U.S. producer prices (PPI) for April unexpectedly declined, and retail sales growth slowed, indicating possible economic challenges. Peter Grant, Vice President and Chief Precious Metals Strategist at Janner Metals, said, “Today's economic data prolongs the timeframe for the Federal Reserve to consider rate cuts, raising dovish market expectations.” Grant added, “Putin's absence from Türkiye-led peace negotiations has diminished expectations for progress in the agreement, further bolstering today's gold prices.” kwonjiun@newspim.com