NEW YORK: Brent crude oil prices rose more than $1 per barrel yesterday after Iran and six world powers fell short of reaching a deal on Tehran’s nuclear programme.
Sanctions against Iran have helped support Brent prices by removing more than 1 million barrels per day (bpd) of oil from world markets. Any rise in Iranian supply could push oil prices lower, analysts say.
Talks between Iran and western nations will resume on November 20. In the meantime, Iran said it would allow United Nations inspectors “managed access” to a uranium mine and heavy-water plant within three months. “If we do get an agreement, where they ease some of the sanctions, you’ll see that reflected in the price of Brent,” said Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut.
“Time will tell whether the Iranians will let people in to explore their nuclear sites.”
Brent was up 82 cents a barrel at $105.94 by 1:30pm (1830 GMT), after touching a session high of $106.40. On Friday, Brent hit a four-month low, then rebounded to close the day up $1.66 but posted a fourth straight weekly decline. US crude was 7 cents higher at $94.67 a barrel, after trading at a session high of $95.38.
Brent prices got a boost as traders covered short positions ahead of the December contract expiry on Thursday.
Money managers cut their net long position for the second week in a row, government data showed on Friday. “Ultimately we were oversold,” said Rich Ilczyszyn, chief market strategist at iitrader.com in Chicago. “We’re getting close to expiration. If you’re short, you have to buy it back.”
Brent’s premium over US oil futures was last trading at $11.29. During the session it widened by as much as $1.17 per barrel to $11.69. Oil found some support from Chinese data pointing to higher fuel demand as the economy accelerates. China’s implied oil demand inched up 0.3 percent in October from a year earlier.
In Libya, tensions remained high after an autonomy movement in the east said on Sunday it had formed a regional oil company to start selling crude after seizing several ports.
Kuwait’s oil minister, Mustapha Al Shamali, earlier said he expected Opec to keep its output target unchanged. Opec, which pumps more than a third of the world’s oil, will meet on December 4 in Vienna to decide its oil production policies. Reuters
