Subscribe free to our newsletters via your
. Earth Science News .

Subscribe free to our newsletters via your

Oil prices retreat as US offers talks with Iran

File photo: An oil rig in Kazakhstan. Crude futures had jumped on Tuesday as traders tracked the latest developments over the Iranian nuclear energy dispute.
by Julie Charpentrat
New York (AFP) May 31, 2006
Crude oil futures fell on global markets Wednesday after the United States offered to hold direct talks with Iran over the Islamic republic's disputed nuclear program.

New York's main contract, light sweet crude for delivery in July, shed 74 cents to 71.29 dollars per barrel in closing trades after trading as low as 70.05.

In London, Brent North Sea crude for July delivery sank 64 cents to finish at 70.41 dollars per barrel.

The United States, in a major policy shift, said it was ready to join direct talks on Iran's nuclear program if Tehran suspended uranium enrichment activities.

Bill O'Grady at AG Edwards said the news on Iran was "the primary factor driving the market."

"If Iran takes the deal, tensions will ease and oil prices will likely decline," the analyst said. "If Iran refuses the deal, the path to sanctions and war looks set."

US Secretary of State Condoleezza Rice made the offer of the first substantive talks with Iran since diplomatic relations were broken off 26 years ago as she prepared to leave for a crucial meeting of world powers in Vienna on Tehran's suspected nuclear arms program.

"To underscore our commitment to a diplomatic solution and to enhance the prospects for success, as soon as Iran fully and verifiably suspends its enrichment and reprocessing activities, the United States will come to the table with our EU-3 colleagues and meet with Iran's representatives," she said.

The market is concerned that Iran -- the world's fourth-biggest producer of crude -- could halt exports should the United Nations impose sanctions over the nuclear program which the Islamic republic insists is strictly for civilian energy production. The West, however, suspects Tehran is planning to build nuclear weapons.

The market also expected the Organization of Petroleum Exporting Countries (OPEC) would stick with the oil cartel's current production quotas when it meets Thursday.

OPEC ministers meet in Caracas to decide production levels but delegates have indicated the 11-member oil cartel will keep its official production quota intact.

The oil cartel has an official production quota of 28 million barrels of day, its highest level in 25 years.

"It looks like (OPEC) are not going to reduce production levels (so) the market has sold off," said Tony Nunan, a Tokyo-based energy risk manager for Mitsubishi Corp.

The US Department of Energy also unveils its weekly market update on crude inventories on Thursday, one day later than normal owing to the Memorial Day public holiday on Monday.

"Crude prices have gotten a little ahead of themselves over the last few days and a pullback could be in order, especially if we get another pattern of product builds (Thursday)," said Man Financial analyst Ed Meir.

Dealers expect that a build-up in US gasoline or petrol supplies, amid the start of the American driving season which sees US holidaymakers take to the roads, will ease supply concerns.

Crude futures had jumped on Tuesday as traders tracked the latest developments over the Iranian nuclear energy dispute, while absorbing new data pointing to buoyant Chinese energy demand.

Related Links

Crude oil prices rise amid Iran concerns
New York (AFP) May 30, 2006
Oil prices jumped on global markets Tuesday as traders tracked the latest developments over the Iranian nuclear crisis, while absorbing new data pointing to buoyant Chinese energy demand.

  • Extending The Reach Of Disaster Relief From Fire To Flood
  • UN says Indonesia quake aid faster than post-tsunami
  • Aid flies in for Indonesia quake victims
  • Indonesia races to cope with quake survivors

  • Climate change could fuel fiercer hurricane cycles: researchers
  • Climate change: Arctic went from greenhouse to icehouse
  • Sea-Surface Warming Linked to Worse Tropical Storms Activity
  • Cutting Energy Waste Crucial To Forestalling Climate Change

  • Ancient City Reveals Life In Desert 2,200 Years Ago
  • Commercial Remote Sensing Satellite Market Stabilizing
  • Digital Globe and Getty Images To Supply Satellite Images To News Media
  • Intermap Technologies Receives Radar Mapping Contract

  • Oil prices retreat as US offers talks with Iran
  • Crude oil prices rise amid Iran concerns
  • EU offers tips on cutting greenhouse gases
  • GE to invest 50 mln dlrs in environment-related R and D in China

  • UN Reports AIDS Progress, But
  • Deaths Mount In Indonesia
  • Malaria, Potato Famine Pathogen Share Surprising Trait
  • Microbe Labs Proposed For California

  • Marauding monkeys wreak havoc on Zanzibar isle
  • DNA Diet Makes For Some Vibrant Bugs
  • Astrobiologist Meet In Sweden
  • Overfishing Puts Southern California Kelp Forest Ecosystems At Risk

  • Pollution turning China's Yangtze river "cancerous"
  • 'Mercury Sponge' Technology Goes From Lab To Market
  • Managing Indian E-Waste
  • Finland hopes to clean up Russian shipping in Baltic

  • Ancient Etruscans Unlikely Ancestors Of Modern Tuscans
  • MIT Poet Develops 'Seeing Machine'
  • Robotic Joystick Reveals How Brain Controls Movement
  • Cure For Reading Glasses May Be In View

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2006 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA PortalReports are copyright European Space Agency. All NASA sourced material is public domain. Additionalcopyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement