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Business News/ Industry / Energy/  Oil near four-month low as Iran talks loom
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Oil near four-month low as Iran talks loom

Brent crude oil was retailing at $104 a barrel on Friday, lowest since early July

File picture of crude oil refinery. Photo: Patrick Semanskey/BloombergPremium
File picture of crude oil refinery. Photo: Patrick Semanskey/Bloomberg

London:

United States Brent Oil Fund LP crude oil steadied around $104 a barrel on Friday, near its lowest since early July, as western powers stepped up work towards a deal with Iran over its nuclear programme that could bring some relief in sanctions. Sanctions have removed more than 1 million barrels per day (bpd) of Iranian crude oil from world markets that are already well supplied and traders say any increase in Iranian supplies would hit oil prices hard.

Diplomats said a deal was far from certain, and it would in any case mark only the first step in a long process towards settling the dispute with Tehran, but an outline agreement could be concluded on Friday. “Talks between Iran and other world powers to put an end to the nuclear stand-off seem to be progressing well and this is weighing on Brent," analysts at Phillip Futures said in a note.

Brent crude was up 50 cents at $103.96 a barrel by 1015 GMT, after losing $1.78 overnight. The US oil gained 23 cents to $94.43 a barrel, after dropping 60 cents in the previous session. Brent is now at its lowest since the first week of July.

Oil found some support from news that Saudi Arabia cut its crude output in October to 9.75 million bpd from 10.1 million bpd in September. The figures were given to Reuters by an industry person familiar with the matter. Chinese economic data also offered support with figures showing a rebound in export growth from the world’s second-biggest oil consumer. But Chinese crude oil imports fell to a 13-month low after hitting a record high in the previous month. China imported 4.81 million bpd of oil in October, down 13.8% on a daily basis from a year ago, according to the General Administration of Customs.

October imports were down 144,000 bpd from a record 6.25 million bpd in September, possibly because oil firms cleared some cargoes through customs ahead of a long national holiday in the first week of October, traders said. Oil got further support from more civil unrest in Libya, where some of the worst fighting in months broke out in the capital Tripoli on Thursday.

But oil markets are generally well supplied, analysts say, and the apparent improvement in relations between Iran and the West is raising the possibility of higher oil supply in future. US Secretary of State John Kerry will join nuclear talks between major powers and Iran in Geneva on Friday in an attempt to nail down a long elusive accord to start resolving the standoff over Tehran’s atomic aims.

Adding impetus to rumours that a deal may be imminent were comments by Israeli Prime Minister Benjamin Netanyahu saying Iran would be getting “the deal of the century" in the talks.

VTB Capital oil and commodities strategist Andrey Kryuchenkov said the Geneva talks were coming at a time when the oil market was already negative. “The theme is overwhelmingly bearish. The long-term fundamental picture is comfortable anyway you look at it." Reuters

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Published: 08 Nov 2013, 06:29 PM IST
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