New York: Crude oil fell after Iran said it was making progress in talks with the European Union (EU) on its nuclear programme, reducing concern that Iranian supplies will be disrupted.
Iran’s chief nuclear negotiator, Ali Larijani, said his country and the EU were approaching “a united view” in some areas. Iran, which has the second-biggest proved oil reserves, has less than a month to suspend uranium enrichment or face new sanctions from the UN Security Council. An energy department report on 26 April showed that US oil supplies rose last week.
“Any progress in the talks is good but there is still a lot to be worried about,” said Eric Wittenauer, an energy analyst at AG Edwards & Sons Inc. in St. Louis. “Prices would move much higher if the talks broke down. What we need to see is talks between the US and Iran.”
Crude oil for June delivery fell 78 cents, or 1.2%, to settle at $65.06 (Rs2,667.46) a barrel at 2:55pm on the New York Mercantile Exchange.
Futures are down 10% from a year ago.
Brent crude oil for June settlement declined 92 cents, or 1.3%, to close at $67.65 a barrel on the London-based ICE Futures exchange.
On 24 March, the United Nations Security Council gave Iran 60 days to suspend uranium enrichment after the country ignored previous deadlines set by the international body. On 19 April, Iranian engineers began feeding uranium gas into spinning centrifuges at the Natanz nuclear plant to produce atomic fuel on an industrial scale, defying UN demands to halt the work.
Almost a quarter of the world’s oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf. Iran is the second-biggest producer in the Organization of Petroleum Exporting Countries (Opec).
Crude-oil inventories in the week ended 20 April rose 2.07 million barrels to 334.5 million barrels, the department reported on Thursday. Supplies were 4.9% above the five-year average for the period, the Energy Department said.
“Crude oil supplies are ample, but gasoline supplies being short is the major focus,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “We really have to see the refineries get their act together and produce more gasoline.”
Petrol stockpiles fell 2.79 million barrels to 194.2 million, the lowest since 7 October 2005, when refineries were shut because of hurricanes Katrina and Rita. Petrol supplies in the week ended 20 April were down 7.2% from the five-year average for the date, the department said.
Mark Bentley in Ankara, Turkey and Eduard Gismatullin in London contributed to this story.