Oil prices mixed in Asian trade

SINGAPORE - Oil prices were mixed in Asian trade Thursday, with the tone easier as the market takes a more relaxed view on the Iran nuclear stand-off and overall Middle East issues, dealers said.

By (AFP)

Published: Thu 7 Sep 2006, 2:22 PM

Last updated: Sat 4 Apr 2015, 4:18 PM

At 3:15 pm (0715 GMT), New York’s main contract, light sweet crude for October delivery, was 20 cents higher at 67.70 dollars a barrel from 67.50 dollars in late US trades Wednesday.

At one point the benchmark contract fell as low as 67.40 dollars, the weakest since April 7 and about 14 percent below the all-time high of 78.40 dollars struck in July.

Brent North Sea crude for October was up 22 cents at 67.15 dollars.

“The market has become a lot more relaxed about what’s happening in the Middle East and concerns are abating” said Mark Pervan, an energy analyst for Daiwa Securities based in Melbourne. “We wont see any supply disruption from Iran.”

Analysts had been concerned over possible supply disruptions that could result from sanctions against Iran but the market increasingly believes the stand-off over Iran’s controversial nuclear programme will simply drag on.

Iran, the world’s fourth-biggest producer of crude, defied an August 31 deadline set by the United Nations Security Council to suspend its uranium enrichment work or face UN sanctions.

The permanent members of the Security Council—Britain, China, France, Russia and the United States, along with Germany—were to meet Thursday to discuss how to respond, with Washington States pushing for UN sanctions.

The United States and other major world powers suspect Iran is using its nuclear enrichment program as a cover to make nuclear weapons but Teheran says its nuclear ambitions are peaceful.

Bart Melek, senior economist at BMO Nesbitt Burns, said the market appears convinced there will be no immediate crisis that will shut down exports from Iran.

“With the probability of robust sanctions receding, traders are increasingly comfortable in removing the price premium associated with the possible disruption of oil flows from the Persian Gulf, pointing towards even lower oil prices in the near-term,” Melek said.

The crisis in Lebanon further eased Thursday after Israel said it would lift its air and sea blockade, having received international assurances over an arms embargo on the Hezbollah Shiite militia.

Elsewhere, concerns over the US hurricane season seem to be abating and traders are less nervous than they were last year.

Pervan said prices have been weighed down on news of a discovery of oil and gas in the Gulf of Mexico but added: “Although the oil find ... is a large discovery, it is small in comparison to US demand.”