Oil near four-month lows as Iran talks loom

by **hlk** Fri 08 Nov 2013, 21:31

Business & Markets 2013
Written by Reuters
Friday, 08 November 2013 19:48
A + A - Reset
LONDON (Nov 8): Brent crude oil steadied around $104 a barrel on Friday,
near its lowest since early July, as Western powers stepped up work towards a
deal with Iran over its nuclear programme that could bring some relief in
sanctions.
Sanctions have removed more than 1 million barrels per day (bpd) of Iranian
crude oil from world markets that are already well supplied and traders say any
increase in Iranian supplies would hit oil prices hard.
Diplomats said a deal was far from certain, and it would in any case mark only
the first step in a long process towards settling the dispute with Tehran, but an
outline agreement could be concluded on Friday.
"Talks between Iran and other world powers to put an end to the nuclear
stand-off seem to be progressing well and this is weighing on Brent," analysts
at Phillip Futures said in a note.
Brent crude was up 50 cents at $103.96 a barrel by 1015 GMT, after losing
$1.78 overnight. U.S. oil gained 23 cents to $94.43 a barrel, after dropping 60
cents in the previous session.
Brent is now at its lowest since the first week of July.
Oil found some support from news that Saudi Arabia cut its crude output in
October to 9.75 million bpd from 10.1 million bpd in September. The figures
were given to Reuters by an industry source familiar with the matter.
Chinese economic data also offered support with figures showing a rebound in
export growth from the world's second-biggest oil consumer. But Chinese crude
oil imports fell to a 13-month low after hitting a record high in the previous month.
China imported 4.81 million bpd of oil in October, down 13.8 percent on a daily basis from a year ago, according to the General
Administration of Customs.
October imports were down 144,000 bpd from a record 6.25 million bpd in September, possibly because oil firms cleared some cargoes
through customs ahead of a long national holiday in the first week of October, traders said.
Oil got further support from more civil unrest in Libya, where some of the worst fighting in months broke out in the capital Tripoli on
Thursday.
But oil markets are generally well supplied, analysts say, and the apparent improvement in relations between Iran and the West is raising
the possibility of higher oil supply in future.
U.S. Secretary of State John Kerry will join nuclear talks between major powers and Iran in Geneva on Friday in an attempt to nail down a
long-elusive accord to start resolving the stand-off over Tehran's atomic aims.
Adding impetus to rumours that a deal may be imminent were comments by Israeli Prime Minister Benjamin Netanyahu saying Iran would
be getting "the deal of the century" in the talks.
VTB Capital oil and commodities strategist Andrey Kryuchenkov said the Geneva talks were coming at a time when the oil market was
already negative:
"The theme is overwhelmingly bearish. The long-term fundamental picture is comfortable anyway you look at it."