Brent slips to near $108 ahead of Iran nuclear talks

The full moon rises in the background over an oil rig at the Kashagan offshore oil field in the Caspian sea in western Kazakhstan August 21, 2013. REUTERS/Stringer·Reuters· (Reuters)

By Ron Bousso LONDON (Reuters) - Brent slipped towards $108 a barrel on Tuesday as investors eyed this week's round of talks between world powers and Iran that could lead to an easing of sanctions on the oil-rich country. Renewed concern about the possible tightening of monetary policy in the United States further undercut prices. January Brent crude fell 19 cents to $108.28 a barrel by 1121 GMT, down for the third straight session. U.S. crude for December edged down 28 cents to $92.75. The six major powers and Iran will meet from Wednesday to try to forge an interim deal on Tehran's nuclear programme. U.S. Secretary of State John Kerry on Monday pressed Iran to finalise a deal, but said he has "no specific expectations" for talks in Geneva. "It seems likely some deal will be signed between the parties over the weekend. It will probably be interim and won't mean much in terms of relief on oil sanctions but it will give an important time frame for the next steps," said Petromatrix analyst Olivier Jakob. Sanctions on Iran have kept around 1 million barrels per day (bpd) of oil from the global market and any deal could allow some of that oil to be sold, depressing a market that is already well supplied. "The price of Brent would be below $100 a barrel if Iran was able to produce and export to its maximum potential," said PVM managing director David Hufton. Two blasts targeted the Iranian embassy in Beirut on Tuesday, leaving at least 23 dead and reviving fears that the 2-1/2-year conflict in Syria could spill over into neighbouring Lebanon. Ongoing supply disruptions in Libya supported Brent futures. Fighting between rival militias and industrial unrest have spread across the country, causing its crude exports to fall by more than 1 million bpd over the past six months. U.S. crude futures posted their biggest daily loss in nearly a week on Monday after top Fed officials pointed to improvements in the U.S. economy that could spur the central bank to start "tapering" its $85 billion-a-month stimulus programme. Comments from likely incoming Fed chief Janet Yellen last week had suggested the central bank would continue with its ultra-loose monetary policy for some time. Many in the markets do not expect any change until March. WIDER SPREAD The price gap between West Texas Intermediate (WTI) and Brent may widen to $15 this week if U.S. oil data showed higher inventories, said Yusuke Seta, a commodity sales manager at Newedge Japan. "WTI is leading the crude market downwards because production in the U.S. is increasing steadily and inventories in Cushing are rising," he said. U.S. crude inventories were forecast to have increased by 100,000 barrels last week, while gasoline supply grew by 200,000 barrels, according to a Reuters poll. Industry group the American Petroleum Institute will release its weekly data later on Tuesday while the U.S. Energy Information Administration will report its data on Wednesday.

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