Oil up above $130 after inconclusive Iran talks

LONDON - Oil rose back above $130 a barrel on Monday after its biggest one-week slide on record, supported by inconclusive talks at the weekend between Iran and world powers over Teheran's nuclear programme.

By (Reuters)

Published: Mon 21 Jul 2008, 5:59 PM

Last updated: Sun 5 Apr 2015, 12:55 PM

Tropical Storm Dolly, which is headed for Mexico's Yucatan Peninsula, also helped boost the market as the storm is set to pass just north of Mexico's huge Cantarell oilfield.

Oil's losses last week were the biggest in dollar terms since futures began trading in New York in 1983 and in percentage terms the steepest sell-off since late 2004.

US light crude for August delivery was up $1.79 at $130.67 by 0921 GMT.

London Brent crude rose $1.97 to $132.16.

‘The outcome of the Geneva meeting with Iran was quite a disappointment and was the main factor in the lift in oil prices this morning,’ said David Moore, a commodities analyst at the Commonwealth Bank of Australia in Sydney.

‘The markets had become quite hopeful on Friday that there would be some sort of a resolution,’ he said.

Major powers on Saturday gave Iran two weeks to answer calls to rein in its nuclear programme or face tougher sanctions.

But the talks ended in stalemate despite unprecedented US participation.

The recent war of words between Iran and the West over Teheran's nuclear programme have contributed to tensions in the Middle East that have helped push oil prices to a record high of $147.27 on July 11.

Oil has doubled in price in the past year and gained around 50 percent since the start of 2008, driven upwards by expectations of long-term supply constraints plus inflows of cash from investors.

Prices had fallen back about $19 from the July 11 record peak, pressured by partly concern over the fragile economy in the United States, the world's biggest energy consumer.

Tropical Storm Dolly, the fourth storm of the 2008 Atlantic hurricane season, is expected to emerge into the Gulf of Mexico on Monday local time, north of the Cantarell oil field and other ports and platforms used by the world's sixth-largest oil producer and top supplier to the United States.

‘She may dissipate, but if direction were to change then a protective shut in of production facilities across the Gulf of Mexico is likely,’ said Rob Laughlin, at broker MF Global.

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