Saturday, July 19, 2008

Oil Gains A Dollar On Easing Iran Tension - July 19, 2008

LONDON: Oil prices rose a dollar on Friday, reversing a little of the sharp fall of this week. Crude had briefly touched a 6 week low earlier in the session as speculation grew of a more conciliatory tone ahead of talks between Iran and diplomats from major powers on Saturday on Tehran’s nuclear ambitions.

US light crude was $1.11 higher at $130.40 a barrel by 23:00 pm IST. It had dropped down to $128.54, the lowest since early June. London Brent crude was 91 cents up at $131.98. US crude fell $15 in the previous three days, putting it on track for its biggest weekly fall since the contract started trading in New York in 1983.

Olivier Jakob with Petromatrix said the expected US presence at the Geneva talks with Iran was a significant factor that the oil market could not ignore. “We will stay neutral on that meeting and would expect to see some book squaring ahead of it,” he said.

The US said this week it was sending an envoy to Geneva to join nuclear talks with Iran for the first time, to underline to the Islamic Republic and others that Washington wanted a diplomatic solution to the impasse.

Iranian foreign minister Manouchehr Mottaki said on Friday he saw almost no possibility of Israel or the US attacking his country over its disputed atomic programme.

The standoff over Iran’s nuclear programme has sparked speculation about a military confrontation with the US or Israel, helping to push up oil prices to above $147 last week.

A five day strike of Brazilian oil workers will end on Friday after limited disruption to production but oil workers in Brazil said they would expand a strike to all production and refining units of state-run Petrobras if they resume action. They will meet on July 25 to discuss their next move.

Sabotage attacks on oil facilities in Nigeria continue to shut nearly a fifth of output in the world’s eight largest oil exporter, cutting some production from one field as soon as output from others is restored.

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