Oil rises from one-month low as Iran talks end

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Oil traded near $113 a barrel on Wednesday, edging up from a one-month low, as world powers ended two days of talks with Iran over its nuclear work with no sign of a breakthrough.

U.S. Federal Reserve Chairman Ben Bernanke's defence of the central bank's bond-buying in testimony before Congress - seen as helping economic recovery and thereby oil demand - also supported oil and other riskier assets for a second day.

Brent crude gained 37 cents to $113.08 a barrel by 1317 GMT. The contract traded as low as $112.41 on Tuesday, its weakest since Jan. 24. U.S. oil gained 5 cents to $92.68.

"There may be some support from the inconclusive talks with Iran around its nuclear programme," said Harry Tchilinguirian, head of commodity strategy at BNP Paribas in London. "Geopolitical tensions with Iran easily flare up and boost the risk premium embedded in the oil price."

A perceived risk to oil supplies from tension between the West and Iran over Tehran's nuclear programme has long supported prices, helping to keep Brent over $100 for most of 2012 and this year.

The two sides have agreed to meet at expert level in Istanbul next month and to hold further high-level negotiations in Kazakhstan in April.

Oil fell to the one-month low on Tuesday after Italy's inconclusive election results revived investor concerns about instability in the euro zone economy.

Brent rallied to a nine-month high near $120 in early February but has since fallen back on signs the global economy remains fragile. Some see the potential for further losses.

"Brent could come down to $110 or $108. We got so overdone to the upside, the market will get similarly overdone to the downside," said Christopher Bellew, a broker at Jefferies Bache in London.

"The downside is going to be because of weak demand in Europe and OPEC not cutting back on their output to fit in with demand."

Prices drew some support from an American Petroleum Institute report on Tuesday showing crude stockpiles rose less than expected.

Stocks rose 904,000 barrels in the week to Feb. 22, the API said, while analysts had expected a rise of 2.4 million barrels. Official data from the Energy Information Administration (EIA) is due later in the day. (Reporting by Alex Lawler and Manash Goswami; Editing by Alison Birrane and Jane Baird)



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


RX7320

When moving hay to feed dairy cows, farmers are seeking a versatile tractor. KITOI’s new Tier 4 RX series tractors ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight