LONDON: Brent crude oil fell toward $108 a barrel yesterday after a week of sharp gains ahead of talks between Iran and the West that could lead to an increase in Iranian crude oil exports.
Major world powers and Iran meet in Geneva on November 20 and 22 for another round of talks over Tehran’s disputed nuclear programme, which the West says is designed to make weapons but Iran says is for peaceful purposes.
Russian President Vladimir Putin told his Iranian counterpart Hassan Rouhani on Monday there was a “real chance” to resolve the standoff over the issue.
Sanctions against Iran over the nuclear dispute have kept around 1 million barrels per day (bpd) of oil from the global market and any deal could allow some of that oil to be sold, depressing a market that is already well supplied.
January Brent crude was down 25 cents at $108.25 a barrel by 1440 GMT, while US crude for December delivery was down 10 cents at $93.74. Brent rose 3.2 percent last week in its biggest gain for more than four months.
“Close attention is being paid to the Iranian talks,” said Andrey Kryuchenkov, oil and commodities strategist at VTB Capital. “We already have plentiful supplies.”
“After last week’s gains, the market was a little over-bought, so we are seeing some small-scale profit-taking.”
CMC Markets chief analyst Ric Spooner said a Middle East risk premium, which had helped prop up global oil prices, had eased in recent weeks.
“There is less potential for major supply declines with constructive news from Iran,” Spooner added.
But tensions in Libya helped keep a floor under oil prices. The country’s deputy intelligence chief was kidnapped on Sunday, highlighting the country’s internal strife which has sharply reduced its oil exports. Reuters
